Dept of Telecommunications removes 3% flooring charge on spectrum utilization costs funds

In a aid for telecom operators, the Division of Telecommunications (DoT) has lastly eliminated the three% flooring charge on spectrum utilization costs (SUC), a transfer which might in the long term make such funds zero on their whole spectrum holding. FE had reported in its Tuesday version that operators had expressed their disappointment on Monday at a pre-bid convention that the federal government, regardless of committing to take away the ground in September 2021, had not but notified it. That they had identified that the non-removal would make the entire train of not charging SUC now onwards meaningless.

“Now we have clarified that the SUC flooring has been eliminated. Regardless of the telecom operators are paying now, that share shall be scale back in future,” an official in DoT mentioned.

The notification issued on the elimination of the ground mentioned that spectrum acquired by auctions held after September 15, 2021 in several entry spectrum bands, won’t appeal to SUC.

The ground was mounted in 2016 to guard authorities revenues as SUC costs at the moment was lowered to three% as an incentive to take part in auctions. Earlier than that operators used to pay between 3%-8% as SUC for spectrum acquired administratively and thru auctions. The federal government got here out with a weighted common system in 2016 that was designed in such a method that with time as operators purchase extra spectrum in auctions, their SUC would come down from say 4.5-5% to three%. It may have gone under that therefore a flooring charge was mounted.

The elimination of the ground charge was required to present impact to the telecom aid bundle introduced by the federal government in September 2021, the place aside from offering a four-year moratorium to operators on their AGR and spectrum dues, the federal government had additionally mentioned that there could be no SUC on airwaves acquired in future auctions.

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