Their doesn’t seem to be a consensus on the license fees for 3G services. If media reports are to be believed, TRAI wants Rs85 Crores for every MHz of spectrum. Insane!!! For any operator to offer 3G services efficiently, he has to have atleast have 5MHz of spectrum. However, recall that, in the past officials and telcos have said that the economics of west can’t be applied in the Indian context because of bandwidth scarcity. Considering Rs425 crores per circle and 23 such circles in India it will cost operators who want to have PAN India presence a whopping $2.0 Billion to acquire the licenses.
The GSM cellcos lobby represented by COAI has offered mere Rs300 crores for all India license. Reliance Telecom, the GSM arm of Anil Ambani’s Reliance Communications has quietly aligned with COAI association and is seeking Rs300 crores as all India 3G license fees. While Tata Indicom has offered Rs1,500 croers for PAN-India 3G license fees.
The GSM lobby has written to IT Minister, Dayanidhi Maran stating,
The spectrum needs of the existing GSM operators as per prevalent guidelines need to be safeguarded and taken care of.
In another response filed by the COAI, in response to governments proposal for hefty fees of Rs85 Crores per MHz of spectrum on the European model of auction, it said,
“COAI reminds the government that European economies have 33% higher GDP than India and the latter is the cheapest telecom market in world. It is therefore submitted that if at all such a benchmark is to be contemplated, it should be adjusted downward based on the ratio of GDP per capita to make the pricing more relevant to the Indian market and environment. This would mean a price of around Rs 300 crore for All India MHz spectrum“.