Telecom Panel Sets 1 Percent Spectrum Usage Charge for 2500MHz Band

As preparations begin for the latest rounds of auction of airwaves, the Telecom Commission on Tuesday zeroed in on 1 percent spectrum usage charge (SUC) for 2,500MHz and 3 percent for all the other bands.

The panel - the highest decision-making authority in telecom policy - is expected to send its recommendations soon for Cabinet approval, highly placed sources in the Department of Telecom said.

Also, the commission has endorsed Telecom Regulatory Authority of India's (Trai) view that simultaneously auction should be held for all the proposed bands, a source said referring to the suggestions made the Trai.

Sources said the upcoming auction may take place in July.

With the government offering more than 2,100MHz spectrum, it is expected to be the largest ever telecom airwave auction, which will help the government mop up a whopping Rs. 5,60,000 crores, or $83 billion, going by the reserve price suggested by the telecom regulator.

In the next auction, the government will put on the block the widest range of these scarce airwaves - in the bands 700MHz, 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz.

"The Notice Inviting Application for the next round of auction is expected to be floated in another 15 days," sources said.

The official sources said the panel on Tuesday suggested the SUC will be calculated on weighted-average methodology. The government gets around Rs. 7,000 crores every year from SUC.

However, it was not immediately clear if the panel has also accepted the reserve price for each bands. But in the past the Telecom Commission has gone by the watchdog's recommendations.

Reacting to the suggestions, Cellular Operators' Association of India (COAI) Rajan S. Mathews told IANS: "The Broadband Wireless Access players will gain the most from this decision. This decision is good for the players who will get bulk spectrum in the upcoming auction."

He also said essentially 2,500MHz is meant for the LTE players and there are not many takers for it. Hence, to make it attractive to the players the government is planning to keep its SUC low at 1 percent.