DoT has merged the Chennai and Tamil Nadu cellular circles for unified licence holders. For new entrants, the entry fee has been set at Rs 2.33 billion (sum of entry fee for both circles). The licence fee for the merged circle has been set at 10 per cent of the aggregate gross revenue (AGR). Cellular operators who have a licence to offer services in the Chennai and Tamil Nadu circles will be transferred to the new regime without any additional cost.

However, there will be a slight increase in the licence fee for operators in Tamil Nadu who are currently paying only 8 per cent of the annual revenue. These operators will have to pay 9 per cent of their revenues as licence fee until 2008, after which all operators would have to pay 10 per cent. Operators who have licences for only one of the circles and do not wish to migrate to the new unified regime will continue to pay the existing fees and levies.