Department of Telecom writes to Trai for views on annual spectrum charges

The Cabinet on Wednesday approved spectrum auction rules except SUC recommended by the inter-ministerial panel -- the Telecom Commission.
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NEW DELHI: Seeking to expedite the proposed mega spectrum auction worth an estimated Rs 5.66 lakh crore, the Department of Telecom (DoT) has sought views of the sectoral regulator Trai on annual spectrum charge model that should be applied to the upcoming sale of mobile radiowaves.

"The DoT has written to Trai seeking its view on Service User Charges (SUC). The letter was sent on Thursday," an official source told PTI.

The Cabinet on Wednesday approved spectrum auction rules except SUC recommended by the inter-ministerial panel -- the Telecom Commission.

The panel had recommended that government should levy 3 per cent SUC on airwaves that will be allocated to companies following the auction.

The Telecom Regulatory Authority of India (Trai) had recommended SUC at a uniform rate of three per cent across the industry and gradually bringing it down to one per cent.

The SUC has been one of most contentious issues of late. Reliance Jio has opposed levying of uniform SUC rates, as suggested by Trai, as it pays only one per cent on its spectrum in 2300 Mhz band (broadband wireless access) and the proposal to levy three per cent would put extra burden on the company.

Finance Minister Arun Jaitley has said that the Telecom Commission took the opinion of Attorney General on SUC after recommendation of Trai was received and hence there was need to consult the regulator again before a final call is taken.

Before 2010, there was only 2G spectrum and hence the calculation of revenue was easy. But the process became complex after new frequencies were allocated to companies for services like 3G and 4G.

A technical panel of DoT has said it is difficult to segregate revenue of companies holding airwaves in multiple bands.

The government, in January 2014, decided to cap SUC at a flat 5 per cent for spectrum that was to be procured in the future auctions.

At that point, telecom operators were asked to pay the weighted average of their existing SUC (on the old rate of 3-8 per cent) based on the quantum of spectrum they hold and five per cent if they acquire new spectrum.

According to a Telecom Ministry official, the DoT has requested Trai to share its view within 15 days so that the auction can be conducted at the earliest.

Key things to know about India’s biggest spectrum auction

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