The government has made reimbursements worth Rs 19.95 billion to Bharat Sanchar Nigam Limited (BSNL) on account of licence fees and spectrum charges for 2004-05. The reimbursement comes by way of a subsidy for the rural communication services provided by BSNL, which would otherwise be economically unviable. Typically, basic and cellular service providers pay a part of their revenue as licence and spectrum fee to the government. The licence fee comprises 12 per cent of revenue for the metros and category "A" circles, 10 per cent of revenue for category "B" circles and 8 per cent for category "C" circles.

Spectrum fee varies between 2 per cent and 4 per cent of the revenue, depending on spectrum usage.