Govt may have to revise its spectrum sharing guidelines

Reliance Jio has scored a big win in its dispute with the department of telecommunications (DoT) over calculation of spectrum usage charge (SUC) in the case of shared spectrum. The Telecom Regulatory Authority of India (TRAI) has backed the telecom company’s methodology that additional charge for shared spectrum can be levied only in the band in which airwaves are shared and not on the entire spectrum held by the operator.

With this, the government may now have to revise its guidelines.

Earlier, in January, Jio had got a relief from the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which had stayed DoT’s demand for charging an additional `1,300 crore from the company towards SUC for the 2016-21 period.

Following TDSAT’s interim relief to Jio, the DoT had sought clarification from TRAI on the calculation methodology.

While coming out with the guidelines related to spectrum sharing way back in 2015, DoT had said that companies who enter into such pacts will have to pay an additional 0.5% over their regular SUC, which is calculated on the adjusted gross revenue of the operators.

According to the guidelines, spectrum sharing can be done between two companies in the same spectrum band. While calculating the SUC, DoT added the 0.5% additional levy on Jio for shared spectrum with Reliance Communications in the 800 MHz band on the overall spectrum charge amount.

Jio’s contention was that since it shared spectrum only in the 800 MHz band, the additional charge should be levied on this very band and not on the overall amount. In the DoT way of computation, the total amount the company needed to pay went up by some `1,300 crore.

“The TRAI recommendation was to add 0.5% only in bands in which spectrum is traded, not on the entire spectrum held. If DoT departed from it, it should have sent a back reference to the regulator and sought its views, which was not done,” Jio had argued before the TDSAT.

In its communication to DoT on the matter, the TRAI on Tuesday said that its recommendation was always to add 0.5% in bands in which spectrum is traded and not on the entire spectrum held by an operator.

“The Authority is of the view that as per the existing spectrum sharing guidelines, which were based on the recommendations of the Authority, 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 telecom service providers,” TRAI has said.

Jio had entered into spectrum sharing pact with RCom in 17 circles between 2016 and 2021 in the spectrum band of 800 MHz. The pact was annulled after Jio acquired the 800 MHz spectrum in the 2021 auctions. The company also acquired spectrum in the 800 MHz band from Bharti Airtel across three circles through a spectrum trading pact in the same year.

Before 2022, telcos have been paying 3-5% as SUC to the government. As part of the telecom reforms in September 2021, the government had scrapped the 3% floor rate of SUC for future spectrum acquisitions, including 5G auctions, which reduced overall SUC payments by telecom operators. Financial Express