Spectrum Auctions: DoT Relieves Telcos by Removing Spectrum Fee Floor Rate

To provide relief to telecommunications service providers, the Department of Telecommunications (DoT) removed the 3% floor rate on spectrum usage fees.

“For spectrum acquired through auctions held after September 15, 2021 in different access frequency bands, no SUC (spectrum usage fee) will be charged,” the DoT said in an order dated June 21, 2022.

The weighted average of SUC tariffs across all spectrum assigned to an operator in all access spectrum bands, including broadband wireless access spectrum in the 2300 MHz/2500 MHz band acquired during of the 2010 auction, will be applied for the invoicing of the SUC.

“The weighted average shall be derived from the sum of the product of the spectrum holdings and the applicable SUC rate, divided by the total spectrum holding. The weighted average rate shall be determined per operator for each service area, the Point says in the command.

The Department of Telecommunications order will provide relief to telecommunications carriers.

“We salute and thank the Government and Minister of Communications for the long-awaited order from the DoT regarding the collection of SUC fees for spectrum in 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz 2500 MHz, 3300 MHz and 26 GHz bands. The order will provide clarity to telecom service providers for upcoming auctions,” said SP Kochhar, Managing Director, Cellular Operators Association of India (COAI).

For the purposes of calculating spectrum usage fees, the Department of Telecommunications has stated that “there must be a minimum/assumed AGR which must not be less than 5% of the bid amount”.

The calculation of spectrum usage fees should be based on the minimum/presumptive AGR or the actual AGR, whichever is greater, the DoT said.

The weighted average rate is maintained at two decimal places by rounding the second decimal place up. Rounding must be done to a figure greater than two decimal places even if the third decimal place is less than five, the DoT noted in order.

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