The Telecom Regulatory Authority of India (TRAI) has issued its response to the back-reference received from the Department of Telecommunications (DoT) on its recommendations on “Methodology of Applying Spectrum Usage Charges (SUC) under the Weighted Average Method of SUC assessment, in cases of Spectrum Sharing” dated August 17, 2020.
The DoT, through its letter dated January 27, 2023, referred back a recommendation of TRAI on the subject for reconsideration of the regulator. After examination, TRAI has finalised its response to the back-reference.
In its recommendations on “Methodology of applying Spectrum Usage Charges (SUC) under the weighted average method of SUC assessment, in cases of Spectrum Sharing” to DoT in 2020, TRAI recommended, inter-alia, that as per the existing spectrum sharing guidelines, an increment of 0.5 per cent on SUC rate should apply on the spectrum holding in specific band in which sharing is taking place, and not on the entire spectrum holding (all bands) of the licensee.
Now, through the back reference, DoT has requested TRAI to reconsider this recommendation keeping in view a decision taken by the Union Cabinet in 2015 and a decision taken by the government in 2021 as part of Telecom Reform 2021. DoT has mentioned that as part of Telecom Reforms 2021, the government decided that spectrum Sharing shall not attract any increase in rate of SUC with effect from October 1, 2021.
In its response to DoT’s back reference, TRAI has reiterated the reasons as to why an increment of 0.5 per cent on SUC rate should apply on the spectrum holding in specific bands in which sharing is taking place, and not on the entire spectrum holding (all bands) of the licensee. The regulator has reproduced the relevant paras of it recommendations dated August 17, 2020. It states that spectrum-sharing arrangement results in an enhanced efficiency resulting into increased capacity. Since the guidelines permit intra-band spectrum sharing only, capacity would be enhanced only in the spectrum bands being shared. An increment in SUC by 0.5 per cent of the overall weighted average SUC would be justified only in a situation wherein a telecom service provider (TSP) is sharing spectrum in all the spectrum bands held by it. Therefore, the authority is of the view that as per the existing spectrum sharing guidelines, which were based on its recommendations, the incremental SUC should apply to the spectrum band which is being shared and not on the overall weighted average SUC, which includes all the spectrum bands held by the TSP. The regulator concurs with the views of the stakeholders that in case incremental SUC is made applicable on overall weighted average, the cost of spectrum sharing could surpass the benefits achieved by the TSPs. Moreover, there is no rationale in incrementing the overall weighted average SUC, post-sharing of spectrum in specific band(s).
