Spectrum usage charge: Trai sticks to flat SUC rate stand

The Union Cabinet, on June 22, had referred back the issue of SUC to Trai for its opinion.

The Telecom Regulatory Authority of India (Trai) has reiterated its stand on having a flat rate of spectrum usage charge (SUC) instead of the current “complex” regime, as per which the charges are based on slab rates. The Union Cabinet, on June 22, had referred back the issue of SUC to Trai for its opinion.

Even as the regulator maintained its stand of having a flat rate regime for calculating the SUC, it has mooted a separate formula for computation of the charges according to the weighted average method, different than the one considered by the inter-ministerial decision making body Telecom Commission.

“While the optimal solution in the view of the Authority is to move to a flat rate regime, we are constrained to limit ourselves to examine the weighted average solution as suggested by Ld. AG and proposed by DoT,” Trai said in its letter to the Department of Telecommunications (DoT).

Trai has recommended that the DoT should also include several alternate factors such as last market-determined price and technical efficiency of spectrum bands to arrive at the weighted average for computing the SUC. The telecom watchdog said that if the spectrum quantity in a band was the only weightage for calculating weighted average formula, it may lead to certain shortcomings.

“Part of this shortcoming is based on the fundamental difficulty of using a proxy — any proxy, on which a weighted average computation is based, will not exactly map the revenue earned by each TSP (telecom service provider) from each band,” Trai said in its letter.

The Telecom Commission had cleared a proposal to use weighted average formula for calculating spectrum SUC based on the total spectrum holding, for all bands allocated to telecom operators.

Sources in the government suggested that with the Trai views coming in, the notice inviting applications for the upcoming spectrum auctions would soon be issued.

“We are also going to auction spectrum soon… hopefully by the end of September, which will help in addressing call drop problem,” Minister of State for Communications Manoj Sinha said on Twitter on Tuesday.

“The total reserve price of spectrum auction is estimated to be around Rs 5.66 lakh crore. We will hold it in a transparent manner,” Sinha added.