Uniform Telecom License Fee Policy

• The fresh telecom policy to be enforced from the next financial year.
• The prescribed limit on spectrum assigned to a service provider will be 2×8 MHz (paired spectrum) for GSM technology for all service areas other than Delhi and Mumbai where it will be 2×10 MHz (paired spectrum). Current prescribed limit is 6.2 MHz of GSM spectrum.
• Above this, the telecom players would be free to acquire additional frequency beyond the prescribed limit, in the open market, should there be an auction of spectrum subject to the limits prescribed for merger of licences.
• All future would be unified and telecom spectrum in each city for operators, would be allotted separately.
• A uniform licence fee of 8% of Adjusted Gross Revenue (AGR) across services and circles as compared to range of 6-8% now. Licence fee is a levy paid by all operators as the annual fee. At present, access service providers (Telecom companies) are charged a license fee of 10% in the Metros and category A areas, 8% in category B areas and 6% in category C areas.
• TRAI will declare a relocation path for existing license holders to the uniform license regime.
• An entry fee will be charged for migration to the unified license.
• Licenses will be renewed for 10 years after expiry.
• Mergers and acquisitions in the telecom sector upto 35% of market share will be allowed under a simple process.
• The new telecom policy does away with the previous license policy of allocating the spectrum to telecom companies in various telecom circles based on regions. This means companies like Vodafone or Bharti Airtel have to acquire different licenses to operate in different cities across India. Going forward, they can pay a migration fee and acquire a national uniform license.
• This declaration is quite important in the backdrop of the Supreme Court verdict that set aside the allocation of 122 licenses in 2008.
• The distinction between wireline and wireless service for determining market share for M&A deals has also been removed by the Govt.
• The higher spectrum usage charge, which is applied on the total spectrum held by both the operators, will act as a deterrent to sharing.