High-level DoT meeting today may be a formality

Key decisions have already been taken at a meeting held last week, it is learnt

NEW DELHI: The meeting of the Telecom Commission, the highest decision-making authority in the Department of Telecommunications (DoT), on Tuesday may be a mere formality as several key decisions are learnt to have been already taken at a high level meeting last week.

Prime Minister Manmohan Singh, finance minister P Chaidambaram and communications minister A Raja met last Tuesday to chalk out the course of action on telecom revenues.

The availability of spectrum remains a big question mark, though. Without adequate availability of the scarce commodity, telecom companies would find it difficult to offer quality services.

Meanwhile, the group of ministers (GoM) constituted in 2007 for vacation of defence spectrum is also scheduled to meet on Tuesday.

However, the defence ministry is learnt to be in no mood for talks on spectrum vacation until a memorandum of understanding (MoU) is signed with the DoT on the modalities of setting up an optic fibre cable (OFC) network for the three Forces - Army, Navy and Air Force.

The Central exchequer will need to spend over Rs 14,000 crore for setting up such an OFC network.

The DoT is against such a move, a senior representative in the communications ministry said.

Perchance, under attack from various quarters for giving away 2G telecom licences to several players earlier this year without an auction process, thereby causing significant losses to the government exchequer, Raja in his meeting with the Prime Minister and finance minister agreed to impose a one-time spectrum fee on telecom service providers holding spectrum over 6.2 MHz.

This is likely to result in Rs 5,000 crore worth of revenue for the government.
At the same meeting, a decision was also taken to hike the annual spectrum usage charge for 2G licencees.

All 2G operators holding up to 8 MHz of spectrum would have to pay an additional 1% spectrum usage charge every year. And, those holding over 8 MHz of spectrum would pay an additional 2% spectrum usage charge annually, highly placed sources said.

Currently, a 2G player pays Rs 1,650 crore as licence fee and is charged between 6% and 8% as annual revenue-share licence fee, depending on the circles it operates in. The current annual spectrum usage charge is between 2% and 6%.

The Prime Minister had last year stated in a public function that the government should aim at maximising revenue from sale of spectrum, as is the practice globally.