Cellular Operators Association of India (COAI) representing GSM service providers and Association of unified service providers of India (AUSPI) representing CDMA players are again at loggerhead over the issue of segregation of revenues of 2G and 3G services. The department of telecommunications (DoT) has said that there will be different spectrum fee for 2G and 3G services.

DoT Clarification / Amendment of 11th September 2008 to the guidelines for auction and allotment of spectrum for 3G services issued on August 01, 2008 states regarding spectrum usage charge: "The Licensee shall pay annual spectrum charge of 1% on the incremental revenue due to 3G Services after a period of one year"

COAI says that the segregation is possible. AUSPI says that the segregation of revenues is not possible.

We are presenting both the views in a simple manner and it is for our readers to make their own judgment.

COAI view on segregation of 2G & 3G Revenues:

• Segregation is envisaged under Policy – only modality to be worked out.
• Lower usage charge for 3G will drive expeditious 3G rollout & help achieve Government''s mobile broadband objectives.
• Segregation being followed in Hong Kong and UK.
• Also being followed in India for CDMA & GSM (under dual allocation).
• Key requirement is that any approach adopted should be simple, transparent, practical, enforceable & auditable. Industry has proposed 3 models which meet the above requirements. As 3G and 2G cellsites are clearly separate & distinctly identifiable:

a) Government can simply count the number of 2G and 3G cellsites of an operator and apportion the AGR in the same ratio

b) Take the traffic generated by 2G & 3G cellsites for various activities (such as incoming calls, outgoing calls, SMS, MMS, data, etc) and apply the resultant traffic ratio to the revenues (taken from the financial statements / balance sheet) that have accrued  from the respective activities