Telecom Commission recommended a Uniform Licence Fee of 8 per cent of AGR

Telecom Commission, the decision-making body of the Department of Telecommunications recommended a uniform licence fee of 8 per cent of adjusted gross revenues (AGR). Uniform license fee of 8 % was recommended as against the prevalent rate of 6-8 per cent depending upon the type of service and circle a firm is operating. The Commission’s move will put more financial pressure on telecom operators.

The Telecom Commission is also likely to impose one-time charges on extra 2G spectrum that operators have been holding beyond the contractual limit of 6.2 MHz.

The Telecom Regulatory Authority of India (TRAI) also recommended a charge of 8 per cent of AGR for deciding the license fee.

TRAI recommended that each MHz of additional spectrum (beyond 6.2 MHz of contractual radio waves) held by operators should have one-time cost of Rs.4571.87 crore (pan-India). The Telecom Commission futher specified that in future additional spectrum would be allotted through the auction route.

The Telecom Commission had accepted the TRAI recommendation on merger and acquisition (M&A), which according to the Commission would help consolidation of the mobile sector that currently has around a dozen players, the highest in the world.

The Commission accepted the TRAI's recommendations on spectrum sharing as well. The spectrum sharing  would be permitted between any two licensees holding spectrum, subject to the condition that the total bandwidth would not cross the permissible limit under mergers. The permission would be for five years, subject to renewal for one more term of five years.

As per the new regulation, pre-2008 operators will need to pay one-time additional spectrum charge.
The operators are currently paying about 6-10%, depending on the circles they operate in. The new figure of 8% is much more than what the TRAI had earlier suggested at 6%.