DoT to revisit flat SUCs

12 Nov 2018

India’s Department of Telecommunications (DoT) is reportedly reconsidering the application of a flat annual spectrum usage charge (SUC) and is expected to contact the law ministry for its opinion on the matter, the Economic Times reports. SUCs currently vary, with different rates having been set for each auction. In 2016, though, the government had proposed setting a uniform rate of 4.5% with the charge to be applied to all existing spectrum licences, lowering the fees for airwaves purchased at the most expensive auctions, although some operators would have to pay more for frequencies purchased at certain auctions – most notably Reliance Jio Infocomm (Jio), which only pays a 1% SUC for the pan-India 2300MHz spectrum awarded in 2010. The DoT opted not to implement the measure, however, after a warning from the attorney general that the SUC for the 2010 auction could not be changed retrospectively, as it was part of a legal auction document. Instead, the DoT set floor rate of 3% of annual gross revenue (AGR) for spectrum across all bands and set the SUC for spectrum sold in October 2016 to 3%, down from the 5% charged in the previous tender.

The DoT is re-examining the issue as it believes that segregation of spectrum allocations will become increasingly difficult, with one official quoted as saying: ‘Going forward, as airwaves become technology neutral, previously fixed SUCs might become outdated and it might be a good decision to just have a flat rate instead.’ The revision of licence fees and SUCs is also a major goal of the government’s new telecom policy.