GSM INDUSTRY PAYING TOO HEAVY A CHARGE FOR ADDITIONAL SPECTRUM

GSM INDUSTRY PAYING TOO HEAVY A CHARGE FOR ADDITIONAL SPECTRUM

+ An Additional Rs. 1800 crores till date
+ An Additional Rs. 6000 crores over next three years
+ Government set to recover 10 times the entry fee over license period from spectrum usage charges alone

New Delhi, August 3, 2007… COAI has strongly refuted allegations that additional spectrum is being given away free to the GSM operators and has stated that in fact, GSM operators are paying an extremely high charge for the additional spectrum that is allotted to them.

Mr. TV Ramachandran, Director General, COAI stated that based on actual data collected, it had been estimated that the GSM industry had already paid an extra Rs. 1,800 crores on account of additional allotments of spectrum. He emphasized that Rs. 1,800 crores was over and above the base 2% spectrum usage charge paid by the industry to the Government.

Mr. Ramachandran said that it was absurd and incorrect to allege that Government had lost Rs. 1800 crores, when the actual facts and figures showed that the Government has actually received an additional Rs. 1,800 crores till date on account of escalated charges applied by them for spectrum usage.

He also stated that given the steady growth in the revenues, the revenues to the Government would also escalate sharply and that it was estimated that if the present rates were to continue, the GSM industry would pay over Rs. 10,000 crores as spectrum usage charges to the Government over the next three years alone, of which almost Rs. 6,000 crores would be on account of the incremental charges for additional spectrum.

In an analysis carried out in the case on a large GSM operator in Delhi, it had been estimated that the said operator, could during the tenure of his license and as per the presently applicable rates, pay the Government as much as Rs. 1,700 crores as charges for spectrum usage. This was:

* Ten times higher than the Entry Fee set for Delhi under the UAS License.
* Far higher than the fees paid for mobile licenses internationally.
* Over and above the other payments made on account of annual license fee, etc.

Mr. Ramachandran hoped that the actual facts and figures clarified that spectrum was not being given away free to GSM operators rather, in fact too heavy a price was being paid by GSM operators for spectrum use.

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