TRAI says only shared spectrum to attract fee of 0.5%

The Telecom Regulatory Authority of India (TRAI) on Monday clarified that the additional spectrum usage charge (SUC) of 0.5% of the adjusted gross revenue (AGR) will only be applicable to shared airwaves by two telecom service providers and not to the entire spectrum holding of a licensee.

For instance, Reliance Jio Infocomm Ltd has been using Reliance Communications’ spectrum in the 800 megahertz band under an asset-sharing agreement since 2016. Both Reliance Jio and RCom will have to pay an additional 0.5% SUC on the airwaves shared and not on the other bands they hold.

“It is clarified that as per the existing spectrum-sharing guidelines, an increment of 0.5% 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,” TRAI said in its recommendations on ‘Methodology of applying Spectrum Usage Charges under the weighted average method of SUC assessment, in cases of Spectrum Sharing’.

TRAI also suggested that two telecom operators in a spectrum-sharing agreement should have the flexibility to exit the clause, which should be mentioned in spectrum-sharing guidelines.

“To provide flexibility to the TSPs to manage their spectrum on need and commercial basis, suitable exit clause for intimation of termination of an existing spectrum-sharing arrangement by the involved TSPs should be included in the spectrum sharing guidelines,” it said.

TRAI’s recommendations come ahead of the Supreme Court hearing where Reliance Jio and RCom have been asked to furnish details of their spectrum-sharing agreement. The department of telecommunications (DoT) has also been asked to submit relevant documents.

On Friday, the Supreme Court had asked Reliance Jio why it should not be held liable for paying the adjusted gross revenue (AGR)-related dues of RCom. However, Reliance Jio is likely to tell the apex court that it is not liable to since most of these dues predate Jio’s use of RCom’s spectrum.

“Jio is unlikely to be impacted as most (AGR) dues of RCom are prior to the spectrum sale…ownership and rights of spectrum in case of spectrum sharing are not transferred, and RJio has been paying SUC for the shared spectrum, in keeping with the regulations,” Axis Capital Ltd said in a report. Live Mint