TDSAT stays hike in spectrum charges

In a development that would hit the government's revenues, telecom tribunal TDSAT on Friday stayed the hike in spectrum charges for both GSM and CDMA mobile operators.

In an interim order, the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) stayed the implementation of the hike in spectrum charges with effect from April over petitions filed by Bharti, Vodafone and Idea.

The TDSAT Bench comprising chairman Justice S B Sinha and member (technical) G D Geha stayed the directions of the department of telecommunications proposing a hike in spectrum charges for mobile operators but said that it would be subject to the outcome of petitions.

Telecom service providers have to pay a percentage of their adjusted gross revenue (AGR) to the government as spectrum usage charge. This charge depends on the quantity of spectrum allotted.

The new charges vary between 3-8 per cent depending upon the quantum of airwaves held by the respective operators.

As per the new charge, an operator holding spectrum up to 4.4 Mhz will be paying 3 per cent of the AGR compared to two per cent now.

According to telecom operators' petitions, the hike is 'arbitrary and discriminatory'.

When contacted the companies declined to comment saying the matter is subjudice.

Most of the incumbent players other than those who got licences in January 2008 are having more that 4.4 MHz of spectrum.

Similarly, for CDMA players with spectrum up to 5.0 Mhz will now have to pay 3 per cent of their AGR as spectrum charge instead of 2 per cent earlier.

The increase in spectrum charges will put pressure on profits of the telecom operators which are  struggling to protect their revenues in the wake of intense competition due to entry of new operators in the field.

For GSM operators having spectrum up to 8.2 Mhz spectrum, the charges will now go up from  4per cent to 5 per cent and for spectrum up to 10.2 Mhz operators have to shell out six per cent of their AGR instead of earlier 4 per cent.

Similarly, for a CDMA player having spectrum up to 10 Mhz will be impacted more as the charges increased by 50 per cent from earlier four per cent to six per cent now.

For GSM players having spectrum up to 12.2 Mhz will now have to pay seven per cent of their AGR instead of earlier 5 per cent and for having spectrum up to 15.2 Mhz they now have to pay a whopping 8 per cent of their AGR in place of the existing 6 per cent levy.