India may finalize 1% spectrum charge for 2,500 MHz, 3% for other bands

telecom tower in India rural area
India’s Telecom Commission may finalize 1 percent spectrum usage charge (SUC) for 2,500 MHz and 3 percent for all the other bands, IANS reports.

India aims to conduct next round of spectrum auction in the next 30-60 days. Bharti Airtel, Idea Cellular, Vodafone and Reliance Jio Infocomm are expected to participate in the spectrum auction – primarily to boost their mobile Internet coverage.

The telecom commission is expected to send its recommendations soon for Cabinet approval, highly placed sources in the Department of Telecom told IANS.

The telecomm 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.

By offering more than 2,100 MHz spectrum, the India government aims to mobilize Rs 560,000 crore or $83 billion, going by the reserve price suggested by the telecom regulator. The July spectrum auction is expected to be the largest ever telecom airwave auction in India.

In the next auction, the government will try to sell spectrum in the bands 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz.

“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 telecom panel on Tuesday suggested the SUC will be calculated on weighted-average methodology. The government gets around Rs 7,000 crore every year from SUC.

It was not immediately clear if the panel has also accepted the reserve price for each bands. In the past the Telecom Commission has gone by the recommendations of TRAI.

Cellular Operators’ Association of India (COAI) director general 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 2,500 MHz 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.