The Telecom Regulatory Authority of India (TRAI) has given the green light to proposals from the Indian government that will see local mobile operators pay higher annual charges for their 2G spectrum. The portion of an operator’s adjusted gross revenues (AGR) that it pays to the government depends on the amount of spectrum it owns, but the new proposals suggest a price hike of around 1 percent across the board. For example, an operator with 4.4MHz spectrum (the most popular block for GSM operators) will have to pay 3 percent of their annual revenues instead of 2 percent. 

According to a report in Unstrung, TRAI initially rejected the proposals – made by India’s Department of Telecom (DOT) – noting that the price increases would amount to around Rs 1,000 crores (US$233 million) in additional payments of spectrum charges. Nevertheless, it now appears to have accepted most of the proposals. One area still to be decided is how the fee increase will affect operators with more than 6.2MHz of spectrum with the DOT suggesting imposing a one-time fee. GSM operators are officially entitled to only 6.2MHz but some have been allocated up to 12MHz on the grounds that their subscriber base is growing.