Model code to delay spectrum trading by 3-4 months: Montek

Planning Commission deputy chairman Montek Singh Ahluwalia today said operationalisation of the model code of conduct would delay spectrum sharing and trading by three to four months though the government had in principle approved the concept.
"Government has accepted that spectrum trading is good thing. I believe TRAI has put some guidelines. Telecom Commission is yet to pronounce on it. This might get delayed because model code of conduct is in place by 3-4 months," he said while speaking at a seminar on Indian Telecom sector.
Presently, government allocates spectrum to telecom firms on the basis of auction. Once the trading is permitted, the companies will be able to sell spectrum to the other telecom licence holders.

It is expected the spectrum trade will encourage optimal use of radiowaves by telecom operators.
Referring to spectrum usage charge, Ahluwalia said it is very high as compared to the rates in other countries.
"...5 per cent SUC is very high...Much higher than in other countries," he said.

Spectrum usage charge (SUC) earlier ranged between 3 to 8 per cent for mobile operators, while for firms with Broadband Wireless Access (BWA) spectrum such as those of Reliance Jio Infocomm Ltd and Tikona, it is 1 per cent.
The charge is levied annually by the government as a percentage of revenue earned from telecom services.

The Empowered Group of Minister of telecom, headed by Finance Minister P Chidambaram decided to charge SUC at flat rate 5 per cent on spectrum acquired through auction.