Virtually rejecting the proposal of a major telecom player for levying a hefty entry fee of Rs 1500 crore (Rs 15 billion) for spectrum to start third generation mobile services, government on Tuesday said this could drive up the cost of telecom services.
Tata Group chairman Ratan Tata is believed to have written to Communication and IT Minister Dayanidhi Maran opposing allocation of spectrum for third generation services free of cost and proposed an one-time entry licence fee of Rs 1500 crore.
Maran said, "I believe the revolution in Indian telecom has taken place because of low tariffs. Any decision the government would take will keep in mind the low tariffs.
"We should not bring the next licence raj. Any move to bring the licence raj will only increase the tariffs and make it disadvantageous to the consumers," the minister added.
TRAI, in its recommendations, has considered 3G services as a continuation of the existing 2G services and, therefore, has suggested no entry fee for allocation of spectrum.
TRAI also recommended lowering of spectrum charges to four per cent of gross adjusted revenue from the existing six per cent and the proposal is believed to have found favour with the DoT as well as other stakeholders.