DoT Rejects TRAI’s Flat-Rate Suggestions On User And Licence Fees

The government, in the new telecom policy documents, may have said that it will be reviewing impositions like licence fee and usage charges for spectrum, the Financial Express reports.

The reviewing will be done to relieve the troubled and financially strained industry. However, the department of telecommunications (DoT), has been refusing to make the changes.

Official sources said a DoT panel had rejected the recent recommendation from the Telecom Regulatory Authority of India (TRAI), which fixed the flat Spectrum Usage Charge (SUC) for operators at 3 per cent of their adjusted gross revenue.

At present, due to the mix of administration-allocated spectra and auctions, the SUC operators get paid between three and five per cent. Higher SUC on spectra allocated by the administration is understandable. However, the SUC on spectrum won on auctions varies, resulting in a weighted average formula, which calculates the operators’ SUC.

TRAI suggested SUC on all spectra won at auctions after 2014 needs to be at three per cent and then slowly decreased to one per cent. TRAI made suggestions since operators paid high prices at sales, and the SUC needs only to cover marginal administrative costs. The DoT panel rejected the flat rate SUC proposal of TRAI, and instead continue with the weighted average formula.

The panel will place their report in front of the digital communications commission (DCC). Apart from SUC, telecom operators pay 8 per cent of their AGR as a licence fee.

The industry is asking for lower taxes and levies, which totals to 30 per cent of revenues. The industry’s debt is over Rs 7 lakh crore. The sector's income is decreasing ever since the tariff war post-Reliance Jio’s launch in September 2016, forcing the government into reduction of levies like SUC.