The Union Cabinet will soon take a decision on whether the Department of Communications (DoT) should continue with the slab system for collection of spectrum usage charges from the operators, say news reports.
Currently, DoT collects spectrum usage charges from the operators on the basis of a slab system, where, operators pay three to eight per cent of their annual revenues as spectrum usage charges. The percentage share to be paid as spectrum usage charge is determined on the basis of the quantum of spectrum held by an operator. .
Earlier, the Telecom Regulatory Authority of India (TRAI?s) proposed that operators pay a flat rate of three per cent as spectrum usage charge. TRAI?s proposal was aimed to ease off some burden on operators given that they were expected to pay a high reserve price in the upcoming spectrum auction. However, later the Empowered Group of Ministers raised this rate from three per cent to five per cent. The move came after the government lowered the reserve price of spectrum in the upcoming auction from Rs 180 billion to Rs 140-150 billion.
However, DoT in its draft note floated for the cabinet?s consideration has expressed its preference to continue with the existing slab system. It has not made any reference to TRAI?s proposal of flat rate.
Industry bodies such as Cellular Operators Association of India is supporting flat rate for collection of spectrum usage charges as it would bring all operators on the same level, irrespective of the quantum of spectrum held by them.
