The ongoing tussle over spectrum usage charge has forced the Department of Telecom to postpone the auction to February 3. The auction was supposed to start on January 23. Sharp differences between operators over spectrum usage charge have, however, put the DoT in a tough spot.
The Telecom Commission is expected to meet on Tuesday to take a view on the charge after which the Empowered Group of Ministers will take a final decision.
A decision on spectrum usage charge is critical for the bidders. Under existing rules, operators are required to pay a fee for using spectrum. This fee — ranging between one per cent and 8 per cent of annual revenue — is determined on the quantum of spectrum an operator holds. TRAI proposed to change this to a flat fee of three per cent, irrespective of the quantum of spectrum.
This has been objected to by broadband players such as Reliance Jio as they pay only one per cent as the spectrum charge and, therefore, would end up paying more if the fee is fixed at three per cent. Incumbent players, including Vodafone and Airtel, however, want the fee to be flat as they pay as much as eight per cent now.
Writes letter The Cabinet had instructed the DoT to take a final view on the issue before the auction. A decision on this issue is crucial for the bidders because a flat fee would encourage operators to buy more spectrum and an escalating charge would discourage telecom companies from increasing their spectrum holding.
In a bid to resolve the stalemate over spectrum charges, Chief Executive Officers of four telecom companies have written to the Prime Minister and the Finance Minister offering a compromise formula.
Chiefs of Airtel, Vodafone, Idea Cellular and Telenor, in a joint letter, said that if a flat spectrum charge was not feasible, then the Government should collect the fee based on technology. For example, all operators offering 4G services using LTE technology should be allowed to pay one per cent of the revenue irrespective of the spectrum band they use for it. Similarly, a uniform fee should be collected from all players offering 3G services.