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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: quartersawyer who wrote (32529)	2/17/2003 4:02:22 PM
From: quartersawyer	Read Replies (1) \| Respond to of 196545

GSM Operators: United They Fight Continued from Page 2 License/Entry Fees>>>>>>>>> Cellular operators say that they have paid much higher entry fees as compared to that paid by basic service operators offering WLL (M) services. Let’s look at the statistics in the post-NTP ’99 and pre-NTP ’99 contexts. Post NTP ’99, cellular service providers have paid an entry fees of Rs 1,633 crore and a performance bank guarantee of Rs 250 crore. This totals to around Rs 1,833 crore for 17 licenses whereas basic service operators have paid entry fees of Rs 768 crore and a performance bank guarantee of Rs 3,072 crore, a total of around Rs 3,840 crore for 25 licenses. So, post NTP ’99, basic operators have paid more than cellular service providers. Pre NTP ’99, cellular service providers have paid Rs 7,300 crore for 42 licenses whereas basic service providers have paid Rs 1,600 crore for six licenses. Thus, in total, cellular service providers have paid Rs 9,133 crore whereas basic service providers have paid Rs 5,440 crore, which has a substantial amount of performance bank guarantee of Rs 3,072 crore. Here, the response of the licensor could be that the license/entry fees looks okay, considering the fact that more licenses were issued in cellular services than in basic services. Even rollout obligations in basic services are more stringent. Revenue Sharing Cellular operators have been complaining that they have been paying 35-42 percent of their revenues by way of high levies and costs like license fees, interconnection charges, spectrum usage charges, and service tax. Their demand is to reduce the revenue share from the existing rate of 12 percent for category A, 10 percent for category B, and 8 percent for category C circles. They point out that reductions in revenue sharing will help them increase their profit margins and there is a possibility that some of the benefits will be passed on to subscribers. This will be a welcome thing, if it comes through. However, this benefits the fixed service providers also, as the same kind of revenue share is likely to be applicable to them as well. Spectrum COAI is of the view that cellular operators are operating with suboptimal spectrum as a majority of them has 6.2 MHz. In Delhi and Mumbai, operators have 8 MHz each. The suboptimal spectrum allocation increases the capital expenditure and also affects the quality of the network if one is not investing in more base stations. COAI has been quoting international examples whereby the average works out to be 2*17 MHz per cellular operator. The matter is currently under review by the Department of Telecom. An increased frequency spectrum will help cellular service providers to minimize capital expenditure, so that they can lower the cost of services and be more competitive vis-à-vis WLL (M) services. It seems that the spectrum issue will take time to get resolved as the defense sector is sitting with lot of spectrum. One solution is that the government takes the existing frequency bands from defense and offers it other frequency bands. Pravin Prashant Joint Industry Development>>>>>>>