No change in entry fee for telecom licences

Telecom Secretary DS Mathur has told the finance ministry that a change in the entry fee that operators must pay for a telecom licence cannot be considered since the matter was approved by the Cabinet in October 2003.

The letter, written late last month, was in response to a letter by Finance Secretary D Subbarao, who had requested the department of telecommunications to "stay" the issue of new licences and those for cross-over technology (from CDMA to GSM services).

Subbarao had also questioned the logic of indexing the licence fee based on an auction price in 2001 for pricing spectrum for cross-over technology applicants.

Mathur's letter said "dual technology" licences were issued by the government on the basis of the regulator's recommendation of August 2007 "which has not suggested any change in the entry fee or licence fee and hence no change was being considered in the existing policy".

Operators opting for "dual technology" licences to offer both CDMA and GSM services on the same licence had to pay the same as the fourth cellular operator in each service area for accessing spectrum.

So, for instance, Reliance Communications, the country's largest CDMA player, paid the equivalent of what was paid by the fourth cellular operator for GSM spectrum in 14 circles.

Mathur's observation comes at a time when there has been hectic lobbying within the government and by operators to raise the entry fee from Rs 1,650 crore (Rs 16.5 billion).

Last week, for instance, Bharti, the largest GSM service provider, suggested that it is ready to pay Rs 2,650 crore (Rs 26.5 billion), or Rs 1,000 crore (Rs 10 billion) more, for 4.4 MHz of spectrum.

Mathur's letter confirms Communications Minister A Raja's comments to bureaucrats in file notings that there is no question of any change in the licence fee norms.