No: WFD/1018/2004

Ministry of Communications & Information Technology

Department of Telecommunications

(Wireless Finance Division)

Sanchar Bhawan, Room No 914, 20 Ashoka Rd., New Delhi 110001

 

Office Memorandum

dated 6 Feb 2004

 

To

The Controller of Communication Accounts.

Maharashtra

 

Sub:     Transfer of work relating to collection of Spectrum Charges in respect of Cellular operators to the Office of Controller of Communication Accounts (O/o CCA) -- Reg.

Ref:      OM dated 34-31/2000--SEA dated 30.01.2001

 

            Attention is invited to the orders contained in the Office Memorandum (para 11 refers) referred to above, whereby the work relating to Collection of Spectrum charges on revenue sharing basis from various operators on behalf of the Government  was delegated to the Office of the CCA's.

 

2.         It has been decided that the O/o the CCA will handle the work relating to collection of Spectrum Charges in respect of Cellular Services in pursuance of the above-mentioned order.  A detailed schedule of activities that are to be undertaken for the smooth transition of work from DOT HQ to the O/o the CCA is given below for strict compliance.

 

3.1 Date of effect

The actual date of effect for collection of Spectrum charges from Cellular operators by the CCA's is 01.0 4. 2004. The Spectrum charges, which are to be collected quarterly, in advance, for the year 2004, are due on 1.1.04, 1.4.2004, 1.7.2004, and 1.10.2004, respectively.  The licensees have been allowed a further period of 15 days from the commencement of the quarter for payment of Spectrum charges.  Thus the last date for the payment of Spectrum charges is the 15th of the month from the commencement of the quarter.  All adjustments/short payments pertaining to the period prior to 1.04.2004 will continue to be collected by DOT HQ.

 

3.2 Submission of Returns on Collection of Spectrum Charges

Since Spectrum charges are being monitored at the highest levels, CCAs are required to send information on the collections made from service providers every month as per (Annexure 'A'), followed by quarterly information on collections.

If there are no payments received in the month, a ‘NIL’ report  is required to be sent invariably.  It must be ensured that the amount mentioned in the monthly report tallies with the booked figure under the relevant head in the Cash Account Current for the month.  If there are any differences, the reasons for the same are to be furnished.  The due date for furnishing the Monthly Report to the DOT is the 5th  of the month following the receipt.  All payments should be in the form of  DD/Pay Order only.  Payments through cheques are not to be received.

 

3.2.2 Credit of DD/Pay Order in Government Account

As these are high-value DD/Pay Orders, it may be ensured that they are deposited in the bank on the same day.  Clearance of the same by the bank is also to be watched through bank reconciliation.

 

3.2.3 Quarterly Accounts reconciliation

A reconciliation will also be required to be done on a quarterly basis between the estimated Spectrum revenue recovered in advance from service providers and the actual Spectrum revenue as per the actual AGR.  The quarterly reconciliation statement is to be submitted to DOT HQ by the 5th of the month following the quarter under report in the format at Annexure ‘B’.  At present, Spectrum charges are collected in advance on a quarterly basis, based on the actual AGR of the service provided for the previous quarter, which is the estimated AGR of the present quarter.  At the time of submission of the actual AGR by the service provider, the difference in the amount of Spectrum charges is to be calculated based on the difference between the estimated AGR and the actual AGR, and the same will be reflected in this proforma.

 

3.3 Classification of Spectrum revenue

The Spectrum charges (% AGR) of the cellular operators (Circle wise) are at present being levied by the Wireless Finance Division (WFD) of DOT.  The Heads of Account for booking of these revenues are -- Sub Major head: 1275 -- Other Communications and Sub Minor Head 103 -- Receipts from WPC.

 

3.4 Rates of Spectrum charges

The quantum of Spectrum charges and leviable from service providers depends on a percentage of the Adjusted Gross R (AGR) and is determined by the bandwidth allotted to the cellular operator.

 

3.4(i) Spectrum Charges from Cellular Operators (Radio Spectrum)

Cellular operators will pay Spectrum charges on revenue sharing basis @ 2% of their AGR for use of the cellular Spectrum up to 4.4 MHz + 4.4 MHz, an additional 1% Spectrum charges for bandwidth up to 6.2 MHz + 6.2 MHz, and a further 1% for bandwidth up to 10 MHz + 10 MHZ.  Since the DOT Headquarters allots the bandwidth, Spectrum charges to be paid by the operators on the basis of the bandwidth allotted would be intimated by the DOT.

 

3.4(ii) Microwave access network (in the frequency bands of 10 GHz and above)

This is to be levied on 112 MHz in Circle /  224 MHz in all four metro cities @ 0.25% of AGR per annum.  And for every additional 28 MHz in any Circle /  56 MHz in the four metro cities or part thereof, @ 0.05% of AGR per annum.

 

3.4(iii) Microwave Backbone Networks (in frequency band below 10 GHz)

This will be levied up to 56 MHz BW @ 0.10% of AGR per annum.  And for every additional 28 MHz or part thereof, @ 0.05% of AGR per annum.

 

3.5 Calculation of Interest/Penalty on delayed payment

Penal interest is to be levied for delayed payments as per the existing practice, and the procedure in vogue for delayed payments will be on the same terms and conditions as in the main DOT license agreement.  Hence according to the provisions of the amendments signed by the licensees, interest on the delayed payment of Spectrum charges is to be levied at the rate of the Prime Lending Rate (PLR) + 5%.  The interest is to be compounded monthly, and a part of the month reckoned as a full month for the purpose of calculation of interest.  In addition, in case the amount paid after self-assessment by an operator falls short by over 10% of the payable Spectrum charges, a penalty of 150% of the entire amount of the short payment is leviable.  However, if such short payment is made good within 60 days from the last day of the financial year, no penalty is to be imposed.  The work of computation of interest/penalty/short payment Exeter will continue to be done by the DOT at present, and any demands on this account will be raised by DOT.

 

4. Maintenance of records

The following registers are to be maintained in the Office of the CCA in order to ensure the timely submission of the returns are referred to in para 3.2 above:

1.                   Collections Register: This registers is intended to record the collections from the licensees on a day-to-day basis.  (The format for the same is enclosed at Annexure-C).

2.                   Revenue Share Register: This Register is intended to record the AGR as per affidavit, and the Revenue Share payment for each quarter.  This register is to be maintained licensee-wise.  This register will form the basis for finalization of the revenue share at the end of the year.  (Format enclosed at Annexure-D)

The head of CCA's will be responsible for proper maintenance of the about records and for submission of the statements prescribed to DOT Headquarters, duly authenticated by him.

 

5. List of documents to be handed over to O/o CCA

The following document will be handed over to the representative of the CCA Office, and who will receive the same under acquittance from Wireless Finance Division.

(i)         The Circle wise/operator wise list containing the rate at which the revenue is to be recovered from the operator along with the bandwidth allotted.  (The details of bandwidths and percentage are based on the information furnished to Wireless Finance by the NTG Group of WPC Wing in October 2002)

 

(Shri R. Kalyanasundaram, ADG (WPF), is the noble officer for this purpose).  His contact number and Fax number are as under:

Tel. No. 23372090 FAX No. 23372087

 

6. Revenue Share from MTNL/BSNL

All dues relating to these organizations will continue to be handled by the Headquarters.  It is not proposed to decentralize the work relating to these units at this stage.

 

7. Time schedule

The collection of revenue share from the licensees is to commence at the CCA Offices from 01.04.2004.  Hence all the heads of the CCA Offices are requested to collect the document mentioned in para 5 above from ADG (WPF) DOT Headquarters, New Delhi when they come for the meeting of CCA is at headquarters on 06.02.2004.

 

8. License agreement & Amendments thereof

It must be ensured that the main license agreement and the amendments thereof a thoroughly studied.  Notwithstanding anything contained in this letter, the terms and conditions stipulated in the license agreement and amendments thereof, with particular emphasis on the financial conditions, have to be adhered to scrupulously.

 

9. Periodical Inspection of CCA

In order to have effective control over the work of collection of the Spectrum charges by the CCAs, a periodical inspection of the CCA's will be conducted by DOT Headquarters.

 

10. CDMA

Orders for the decentralization of collections from CDMA operators will follow later.

 

 

 

-S/d-

R. Kalyanasundaram

ADG (WPF)

Copy to:

1.       Senior PPS to Chairman Telecom Commission

2.       Senior PPS to Member (Finance)/Member (P)/Member (T)

3.        Advisor (F)

4.        Wireless Advisor

5.        Sr DDGs/DDGs FEB/TPF/LF/Accounts/VAS/BS

6.        Director (LF)/Director (TA--I) DOT HQ

7.        DWA (V), WPC