The Hindu : Business : Tata favours one-time licence fee for spectrum allocation

Online edition of India's National Newspaper
Saturday, May 14, 2005

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Business

Tata favours one-time licence fee for spectrum allocation

Staff Reporter

CHENNAI: The Tata Group Chairman, Ratan Tata, has opposed allocation of spectrum for third generation (3G) telecom services free of cost. Instead, he favours a fixed one-time-licence-fee model in which each of the telecom operators will pay Rs.1,500 crores for the spectrum on an all-India basis.

In a communication to Dayanidhi Maran, Union Minister of Communications and Information Technology, he said: "The objective of such a fee would mainly be to provide a disincentive for hoarding and/or inefficient use of spectrum. The quantum of such a fee could be around Rs.1,500 crores per operator on an all-India basis."

Noting that the telecom service provider in the conglomerate, Tata Teleservices Limited, would be willing to pay such a one-time-licence-fee for the 3G spectrum, Mr. Tata said, "TTSL would also be willing to pay an annual revenue share to the government as may be decided."

Further if the demand outstrips supply, the Centre should assign spectrum to the operator paying the highest revenue share in addition to the entry fee. The government, he added, should invite bids only from those operators who agree to pay Rs.1,500 crores as entry fee.

Prescribing a mere rollout obligation might not be enough, he said in the communication dated May 11, adding such obligations had not been highly effective in the past. Mr. Tata said a minimum of 5 + 5 MHz of 3G spectrum should be offered on a non-discriminatory basis to all existing unified access licencees and cellular mobile service providers on an all-India basis. Further, the Centre to ensure transparency in the process should invite bids from the operators for the 3G spectrum within two weeks of announcement of the Spectrum policy, he added.

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