4.3.3  Spectrum Pricing and need for technology and service neutrality 

In a Unified License regime, the endeavour is to proceed from technology 

neutrality to service neutrality. Accordingly, the Government in its guidelines 

on Mergers & Acquisition have decided to charge the same license fees for 

spectrum irrespective of the technology or service. Letter No. 20/232/2004   

BS III dated 17th March 2004 on the issue of guidelines for Mergers and 

Acquisition in a Service Area states 

 5. The spectrum charges shall be calculated for the total spectrum held by 

the merged entity as Govt. has already decided that spectrum charges shall 

be same for CDMA and GSM . 

4.4 

Options for evolving a structure for pricing spectrum 

In the existing framework, the spectrum charge has two components i.e., an 

entry fees and an annual license fees. The objective is to devise a pricing 

strategy taking into account both these components. 

Internationally, the practices vary from country to country. Table 4.1 clearly 

demonstrates that while in some countries there is no one off fees there is 

high recurring fees and in others vice versa. 

The issue to deliberate upon is whether to continue with the present scheme 

of determining entry fees through a competitive mechanism together with a 

pricing mechanism for annual charges or to have only entry fees or only 

annual license fees. 

It may perhaps be advisable that the entry fees for spectrum be kept separate 

from the annual license fees.  The prime reason being the fact that the basis 

for determining these fees are different. 

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