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India telcos ordered to pay govt more revenue share

Telecoms department has issued fresh notices to three operators, with remaining telcos to follow, demanding they pay an additional charges for spectrum used since 2008.
Written by Jamie Yap, Contributor

India's telecommunications department (DoT) has issued fresh notices to three operators, Vodafone India, Bharti Airtel and Reliance Communications, demanding they pay an additional revenue share for spectrum usage since 2008.

DoT officials said similar notices will be issued to other operators over the next few days, the Economic Times reported Thursday.

The notices are the latest blow to the country's mobile operators which are already contesting hefty penalties, fines and one-time spectrum charges.

Mobile operators in India are already faced with hefty penalties, fines and one-time spectrum charges.

Vodadone has been given four separate notices to pay an additional INR 8.7 billion (US$163 million), while Bharti Airtel has been issued several notices totaling INR 12 billion (US$223 million), the report said. A Reliance Communications (RCom) executive said the company received notices regarding additional charges for airwaves, but did not reveal the amount it has been asked to pay, it added.

The dispute revolves around how the share of revenue which Indian telcos are obliged to pay to the government is calculated. The government considers that this revenue share is applicable on total aggregate gross revenues (AGR) of the operators. Telcos however argue that this charge is applicable only on revenue from mobile services, the Economic Times reported.

A DoT official said notices were being issued after the Supreme Court ruled in October 2011 that the government could collect revenue from non-telecom activities. DoT has since recalculated the license fee to include, among others, revenues from corporate receipts, handset sales, real estate transactions and interest earned from bank deposits. According to the report, the Supreme Court had ruled the telecom ministry's jurisdiction on the issue cannot be questioned.

The Court pointed out the telecom regulator, Telecom Regulatory Authority of India (TRAI), and tribunal, TDSAT, have no jurisdiction to decide the validity of the terms and conditions of the license, including the definition of AGR incorporated in the license agreement.

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