Telecom regulator Trai on Tuesday reiterated its suggestion of charging mobile operators a flat spectrum charge as it found loopholes in existing method used by Government to collect levy for use of airwaves.
“While taking a view on this matter, all possible steps should be considered by the DoT (Department of Telecom) to move to a simple, transparent and flat ad valorem SUC (spectrum usage charge) regime in accordance with law,” Trai said in its reply to reference sought by the DoT.
It has said that present ‘weighted average’ based formula may have a significant impact on the revenue payable to the Government.
“The over-all SUC rate arrived at by the weighted average formula is also impacted by SUC rate fixed for each band...This may have a significant impact on the overall spectrum usage charge that is payable to the Government,” Trai said.
The Cabinet last month approved rules for mega-spectrum auction in which airwaves worth Rs 5.66 lakh crore will be put for sale except spectrum usage charges (SUC) recommended by the inter-ministerial panel Telecom Commission. The Cabinet asked telecom ministry to seek Trai’s view on SUC before it approves the rule.
As per Trai, Government considers only quantum of spectrum held by a telecom operator to calculate spectrum usage charge but this may not give correct value as intended under the concept of collecting this charge.
“While quantum of spectrum will certainly be a factor in any weighted average formula, this may not be the sole factor to estimate the revenue from a given band. It is widely accepted that currently some spectrum bands generate greater revenue than others even if the holding is smaller than in other bands,” Trai said.
It has suggested to DoT to take into account benefit that a spectrum band delivers and bid price of the airwaves can be used as one of the factor to determine an ‘approximate’ value for calculating SUC.