REGULATORY ENVIROMENT AND FDI NORMS

I. FOREIGN DIRECT INVESTMENT NORMS

100% FDI in telecommunications sector is allowed in the Telecom, wherein upto

49% is allowed through the automatic route and beyond 49% FDI in telecom
sector under government route.

This is applicable in case of Basic, Cellular, Unified License (Access Services),

Unified License, National/ International Long Distance, Commercial V-Sat,
Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal
Communications Services (GMPCS), all types of ISP licenses, Voice Mail /
Audiotex / UMS, Resale of IPLC, Mobile Number Portability Services,
Infrastructure Provider Category – I (providing dark fibre, right of way, duct
space, tower) except Other Service Providers.

II. TAXATION

Goods & Services Tax

Telecommunication services presently attract service tax of 14% along with

Swachh Bharat Cess (SBC) of 0.5% and Krishi Kalyan Cess (KKC) of 0.5%.
Making it a sum total of 15%.

Presently telecom service providers are neither eligible for credit of VAT paid on
goods nor of special additional duty (SAD) paid on imported goods/equipment.

Adjusted Gross Revenue (AGR) Fees

Since 1999, the government has announced a revenue sharing model . According
to which the telecom companies are supposed to pay a percentage of their TOTAL
REVENUE (including non-telecom revenues as well) with the government.

There are two types of fees:

1. Spectrum Usage Charges – 3-5%
2. Licensing Fees – 8%
 SPECTRUM ALLOCATION POLICY

Important Dates for Verizon;

Last Date for Submission February 5, 2021
Spectrum Auction March, 2021
Last Auction 2016

Spectrum Available: 4G in the 700, 800, 900, 1,800, 2,100, 2,300, and 2,500 MHz frequency
bands
Reserve Price: Rs. 3.92 Lakh Crore
Process for Verizon to become eligible participant
In this sale, Verizon would be able to bid for new spectrum – for which it would need to
setup an entity; proposed Verizon Telecommunications India (Pvt.) Ltd. that has to be
registered in India and set up a branch in India. Another route is to tie up with another
company in India.
Verizon would be able to bid prior to legal formalities, but the formalities must be completed
at earliest to retain and use the airwaves won.
Competitors bidding:
1. Reliance Jio – YES, 55 MHz. Renewal of 44 MHz not expected (purchased from
RComm)
2. VI – No bidding expected.
3. Bharti Airtel – Renewal, no new bid.

Payment Options
1. Plan for 700, 800 & 900 MHz waves

25% upfront payment and rest later (fixed or AGR at 3% SUC)

2. Plan for Above 1GHz bands

50% upfront payment and rest later (fixed or AGT at 3% SUC)

Circles & Geographic Areas

Auction and bidding would be for different geographies. India is divided into 22 circles,
Verizon would need to plan their entry and bid accordingly.