Debate Over 3G Licence Fees

Business Line: India’s Department of Telecom wants the fee for a pan-India 3G licence to be Rs. 300 crore. The Finance Ministry wants it to be Rs. 600 cr. Reliance Communication wants a staggered licencing structure at Rs. 150cr for Metro cities and Circle A networks, and Rs.100cr and Rs.50cr for Circle B and Circle C respectively. The Tata’s are willing to risk Rs.1500cr, probably hoping to acquire the exclusivity that has so far eluded them. The GSM consortium wants to pay nothing to enable 3G, claiming that it’s an extension of cellular services.
V Sridhar, a professor at MDI (Gurgaon) believes that “Fees will also prevent hoarding of spectrum by operators and hence will lead to its efficient use”. True, but the long term interest of all stakeholders lies in enabling inexpensive access to value added services. Sooner or later, they a price skimming policy will have to give way to a mass based approach.
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