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India Approves $5.7 Billion Bill for Radio Spectrum

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India's government has approved plans to issue a one off surcharge of up to USD5.7 billion on the mobile networks who hold what is deemed to be surplus radio spectrum.

The move will hurt the older networks who were offered more radio spectrum than their later competitors. The mobile networks can avoid the fee by surrendering any unwanted spectrum above 4.4Mhz back to the regulator.

GSM-operators holding more than 6.2 MHz of spectrum will pay a retroactive fee for the airwaves from July 2008. The levy is being set based on the price expected from the upcoming GSM license auction. The final amount will depend on the outcome of the auction.

The auction is however not expected to raise as much as previously expected due to a lack of interest from new entrants and that none of them have applied to bid for a pan-India license.

A separate levy on the CDMA operators has been deferred due to the cancellation of the spectrum auction following the withdrawal of the bidders.

The government also approved plans to levy a surcharge on any company that seeks to buy an incumbent operator instead of bidding in the new auction. They will face a charge equivalent to the new license prices.

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Tags: radio spectrum  India