Cabinet finalises 5% usage charge for spectrum in 1800 MHz and 900 MHz bands

The union cabinet has approved a 5-per cent usage charge for spectrum in the 1800 MHz and 900 MHz bands acquired in the current auction.

For a combination of existing spectrum in this band and spectrum acquired through the auction, the weighted average will apply to all the spectrum held by the operator in 900 MHz and 1800 MHz band.

The licensees who do not acquire spectrum in the current auction will continue to pay spectrum usage charge (SUC) according to the existing slab rate.

As 800 MHz spectrum is not being auctioned in the forthcoming auction and the recommendation of the Telecom Regulatory Authority of India (TRAI) has been sought for the reserve price, the decision in respect of Code Division Multiple Access (CDMA) spectrum will be taken at an appropriate time, a cabinet note said.

In respect of Broadband Wireless Access (BWA) spectrum acquired through auction in 2010, SUC will continue to be charged according to the current  practice and the operator would be required to report the revenue earned from BWA spectrum separately.

The cabinet noted that as a matter of policy, it is desirable to move to a flat rate SUC and that the adoption of a weighted average would provide a path for such transition.

The government expects the revised pricing policy decisions to improve the bidding sentiment in the forthcoming auction.

The Department of Telecommunications (DoT) has, meanwhile, published the 'final list of bidders' for the auction of spectrum in 1800 MHz and 900 MHz bands.

All the 8 applicants, including Vodafone India Limited, Bharti Airtel Limited, Aircel Limited, Idea Cellular Limited, Tata Teleservices Limited, Reliance Jio Infocomm Ltd, Telewings Communications services P Ltd, and Reliance communication Limited find place in this list.

The next step of holding 'mock auction' was completed on 30 and 31 January 2014. The auction is due to start on 3 February 2014.