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2014 2G Auctions: 5% Spectrum Usage Fee For New Spectrum; Pre-Qualified Bidders

Our coverage of the 2G Auctions is brought to you by OnMobile Global, India’s leading Mobile Value Added Services [VAS] company In a possible bid to increase participation for the forthcoming 2G spectrum auction, the empowered group of ministers (EGoM) has reduced the spectrum usage charges to a fixed 5% of the telco's annual gross revenues on all the new spectrum sold during the auction, Telecom minister Kapil Sibal has told PTI (via The Hindu Business Line). This decision is now awaiting a final approval from the Union Cabinet. Earlier, telcos were charged between 3% to 8% of the gross revenues based on the amount of spectrum held by the operators. However, as per the new rates, telcos now have to pay a weighted average of their existing spectrum usage charge and a fixed 5% usage charge for the new spectrum. 1% SUC for BWA players The spectrum usage charge for operators with broadband wireless access (BWA) spectrum remains at 1% of their annual gross revenues, although they will have to pay a usage charge of 5% for the new spectrum acquired during the spectrum auction next week. Cellular Operators' Association of India (COAI) Director-General Rajan Mathews however has expressed concerns on this, saying that 4G players should also pay the same usage charge as GSM operators, especially now that Reliance Jio has received pan-India unified license through which it can offer voice services to its consumers, thereby creating an unlevel playing field. List Of Pre-Qualified Bidders The Department of Telecommunications (DoT) has also released (pdf) a list of pre-qualified bidders for the 2G…

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