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Government announces New Telecom License Fee Policy

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The Telecom Minister Kapil Sibal today announced a new uniform telecom license fee policy under the New Telecom Policy. Under the new Policy, All Future License will be unified license unlike regional licenses and would be delinked from spectrum. All Telecom License would now come for 10 years only.

“All future licenses would be unified and telecom spectrum in each city for operators would be allotted separately,” said Mr. Kapil Sibal. 

Operators will also now have to pay a unified license fee across all telecommunication services at 8% of adjusted gross revenue. Telecom operators are currently paying 6%-10% of their revenue as license fees for basic mobile services, depending on the areas they operate in.

Mr. Sibal also announced that TRAI will announce a migration path for existing license holders to the uniform license regime.  

In a relief to incumbent operator like Airtel & Vodafone, the new policy allowed spectrum holding till 10 MHz This will be now prescribed limit. In case, operators want more spectrum, they can participate in an auction and get it. But Mr. Kapil failed to clear whether the proposed one time spectrum (holding) fee would be calculated as per the new policy or 6.2 MHz as advised by the Telecom Commission.

Also, now Telecom Operators can share 2G Spectrum in a single service area for proper utilization of scarce resource. Tough operators cannot share any 3G Spectrum anywhere.

The Merger and Acquisition norms are also eased a bit allowing a merged entity to hold upto 35 per cent market share and 25 per cent bandwidth in a telecom service area

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