The Hindu Business Line : 3G entry fee remains contentious issue

Debate continues
The Finance Ministry is for an entry fee of over Rs 600 crore while DoT suggests Rs 300 crore.
Reliance has proposed a staggered fee depending on circle of operation
Tatas have suggested a one-time entry fee of Rs 1,500 crore

New Delhi , Aug. 13

The debate over the quantum of the entry fee for third generation (3G) telecom services has not only created a divide among the mobile operators but also between various Government departments. While the Department of Telecom (DoT) is pushing for a minimal entry fee of about Rs 300 crore for a pan-India 3G licence, the Finance Ministry is looking at a higher number of over Rs 600 crore.

This comes even as the operators have got into a knot over what should be the right entry fee for 3G services. The latest proposal is from Reliance Communications, which has proposed a staggered fee depending on the circle of operation.

Fee options

The largest CDMA operator in the country has proposed Rs 150 crore for a 3G licence for offering services in Metros cities and Circle A states, Rs 100 crore for all the Circle B states and Rs 50 crore for all the Circle C states.

On the other hand, the Tatas have long back suggested a one-time entry fee of Rs 1,500 crore for all the operators wanting to offer 3G services.

At the other extreme is the GSM camp led by the Cellular Operator's Association of India, which does not want to pay anything on the ground that 3G services should be treated as an extension of the existing cellular services.

Right balance

Earlier, a committeeof DoT as well as a standing committee in consultation with Defence estimated the rehabilitation cost for vacating the 3G spectrum to be around Rs 1,000 - 1,200 crore, which may be recovered from the operators in the form of entry fee.

Meanwhile, the Telecom Regulatory Authority of India is in the process of finalising its recommendations for 3G policy. "Everyone realises that the Government has to find the right balance between keeping 3G services affordable and at the same time taking care of the revenues that it might want to make for the spectrum.

"If the entry fee is too high, the services will get expensive as seen in other countries. But, a zero entry fee is also being seen as impractical," said a market watcher.

While officially operators are sticking to their respective stance, most of them are likely to accept anything between Rs 300 crore and Rs 400 crore as the entry fee. Anything above that may find no takers.

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