Telecom Commission approves policy changes

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Telecom Commission gives its consent for uniform revenue share for operators at 8.5 per cent of annual sales. It is also limiting the maximum amount of airwaves a company can hold, and delinking spectrum from licences in the future where the renewed licence would be valid only for 10 years instead of 20 years now.

The commission has also approved stricter roll out norms mandating mobile phone companies to offer services in all regions that have more than 500 residents, a move that will significantly increase their capital and operating expenditure. The new rules would get clearance by October 2011, tentatively. The apex body has rejected Trai’s proposals that the revenue share be reduced gradually over the next four years to 6%, allowing the industry to save about 6,500 crore in levies by 2014.

At present, telcos share 6-10% of annual revenues towards licence fee depending on the area of operation – licence fee is highest at 10% for metros and category A regions, which include lucrative states like Tamil Nadu, Andhra Pradesh & Maharashtra. However, it has cleared Trai’s plan that mobile phone companies be given the contracted amount of airwaves (6.2 MHz for GSM and 5 MHz for CDMA) at a price fixed by the regulator equivalent to the market value of spectrum at that time.

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