DoT writes to Trai for views on annual spectrum charges

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 Telecom Regulatory Authority of India (Trai) on an 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% SUC on airwaves that will be allocated to companies following the auction.

The Trai had recommended SUC at a uniform rate of 3% across the industry and gradually bringing it down to 1%. 

The SUC has been one of the most contentious issues of late. Reliance Jio has opposed levying of uniform SUC rates, as suggested by the Trai, as it pays only 1% on its spectrum in 2300 Mhz band (broadband wireless access) and the proposal to levy 3% 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 the 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 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% for spectrum that was to be procured in future auctions.

At that point, telecom operators were asked to pay a weighted average of their existing SUC (on the old rate of 3-8%) based on the quantum of spectrum they hold and 5% if they acquire new spectrum.

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