India’s Telecom Commission set the spectrum usage charge for the next batch of spectrum to be sold at a minimum of 3 per cent of revenue, increasing the fees for Reliance Jio Infocomm and Aircel, Economic Times reported.
The commission’s proposal will be reviewed by the cabinet next week. The next auctions, which have been delayed by the spectrum usage fee issue, can go ahead 45 days after the cabinet gives the green light.
In June, the cabinet approved a huge spectrum auction plan proposed by the regulator. Initial reports said the auction was expected to raise a record INR5.6 trillion ($83 billion), exceeding the country’s last auction, which raised INR1.1 trillion.
According to the Times, Jio, based to the earlier formula proposed by the commission, would have a spectrum usage fee of 2.88 per cent of revenue, but will now have to pay 3.05 per cent. It will have to pay an additional 0.5 per cent as it shares spectrum from Reliance Communications.
The 4G newcomer will continue to pay a 1 per cent fee on the spectrum it won in 2010.
Aircel’s fee will rise from 2.83 per cent under the previous recommendation to 3 per cent.
India’s top mobile operators, which pay a higher usage fee, have pushed the government to impose a flat 3 per cent usage charge across all spectrum bands, regardless of how they were acquired, and want to see the fee gradually cut to 1 per cent to encourage investment. But the Telecom Department has not accepted this option.
The newspaper quoted Rajan Mathews, director general of Cellular Operators Association of India, as saying: “The telecoms industry is disappointed with the commission’s decision to continue with a weighted average methodology for calculating the spectrum usage charge. We believe that the dangers highlighted by the Telecom Regulatory Authority of India of revenue arbitrage are still prevalent and we hoped the government would switch over to a flat rate instead of a weighted charge, which is different for each operator.”