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Telcos need not pay usage charge for auctions held after September 2021: DoT

In a bid to give relief to telecom service providers (TSPs), the government in an order has said that no spectrum usage charge (SUC) will be charged for spectrum acquired through auctions held after September 15, 2021.

“The weighted average of SUC rates across all spectrum assigned to an operator (administratively or through auction/trading) in all access spectrum bands, including broadband wireless access spectrum in 2300 MHz/2500 MHz band acquired in 2010 auction, shall be applied for charging SUC,” the Department of Telecommunications (DoT) said in the order dated June 21.

It further said the weighted average is to be derived by a sum of product of spectrum holdings and applicable SUC rate, divided by total spectrum holding. “The weighted average rate should be determined operator-wise for each service area,” it said.

Analysts say this will provide a bit of relief to TSPs (by a few thousand crore rupees), thereby giving them more pocket for the upcoming spectrum auctions.

The DoT order also mentioned that for calculating SUC, there shall be a minimum/presumptive average gross revenue (AGR) which shall not be less than 5 per cent of the bid amount. “The calculation shall be on the basis of minimum/presumptive AGR or the actual AGR, whichever is higher,” it said.

“The order shall come into force with immediate effect. The above rates of SUC are subject to review by the government from time to time,” it added.

Published on

June 22, 2022

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