DoT may ask Trai to review recommendation of 3% flat spectrum usage charge

The department of telecommunications (DoT) may ask the Telecom Regulatory Authority of India (Trai) to review its recommendation of 3 per cent flat spectrum usage charge on airwaves to be auctioned in the upcoming sale. This is because the levy may have legal implications in the future.

The department is of the view that there already exists the legally-approved weighted average method for calculating user fees and a new formula may discourage the service providers from bidding in the auctions besides garnering lower revenues for the exchequer.

A spectrum usage charge is levied on mobile services companies as a percentage of their adjusted gross revenue (AGR) and is payable as per the spectrum slabs notified by the government from time to time. “The law ministry approved weighted average formula already exists and charging a flat user fee may irk the service providers,” an official said.

A flat levy may also lead to revenue loss to the government as it currently receives higher fees from the operators who bagged spectrum in the previous auctions. At the same time, the proposal would also mean a higher levy for some firms.

Apart from suggestion on spectrum usage fees, the department is likely to agree to the remaining recommendations made by the regulator and is expected to send its response to the latter by the end of this month.

In August 2018, Trai gave its recommendations for the auction of eight bands, including the fifth generation (5G) ultra high speed telephony.  Airwaves worth around Rs 5.06 trillion will be on offer to telecom operators in the next round of auction. Trai has recommended slashing the base price of premium 4G airwaves in the 700 MHz band by almost 43 per cent and set Rs 492 crore per unit as the minimum rate for 5G spectrum. 

The 700 MHz premium band is considered most efficient and stable for 4G services. 

The starting prices for most bands — 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2100 MHz, 2300 MHz and 2500 Mhz, besides 5G spectrum in the 3300-3600 MHz range — were lowered from those set at the previous sale in October 2016, when 60 per cent of the spectrum went unsold.