DoT Allows Telcos to Lower Radio Spectrum Usage Fees in 5G Auctions

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The Department of Telecommunications (DoT) has issued a new order that will allow telecom operators to proportionally reduce spectrum usage fees when purchasing new radio waves at the upcoming 5G auction.

The DoT, in the order dated June 21, waived Spectrum Utilization Charges (SUC) for radio waves that will be purchased at the auction scheduled to begin July 26.

The government next month will auction around Rs. 4.3 lakh crore of airwaves capable of delivering fifth-generation or 5G telecommunications services, including ultra-high-speed internet.

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The DoT collects a company’s SUC based on a weighted average method, where the applicable fees for each auction and acquired spectrum are taken into account and the sum is divided by the total spectrum acquired by it in various auctions.

The order notifies a new formula that makes the SUC rate zero for the upcoming auction.

Until the previous auction, telecom operators were required to pay SUC based on 3% of the amount at which they purchased the spectrum. The Cabinet in September 2021 had approved the removal of SUC from future auctions.

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“The SUC order by the DoT is a positive move with an interpretative drop of 3%. The industry could see real benefit from the zero SUC fees offered in the 5G auction being made available to participating players,” said Prashant Singhal. , Head of EY Global TMT Emerging Markets.

“We salute and thank the Government and Minister of Communications for the long-awaited DoT order regarding the collection of SUC fees for spectrum…The order will provide clarity to telecommunications service providers for the upcoming auctions” , said the director general SP of the industry body COAI. said Kochhar.

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