Could India’s shared spectrum charging system change?

Could India’s shared spectrum charging system change?

The apparently obscure topic of spectrum usage charges (SUC) related to shared spectrum has been in the news in India of late. In fact operators may be taking a very strong interest in Telecom Regulatory Authority of India (TRAI) plans to consult on the topic.

At the moment an extra 0.5 percent of revenue is levied on access service providers as SUC when two operators share a spectrum band in which they both hold frequencies. TRAI had justified this on the basis that the pooling of spectrum would increase spectrum utilisation and additional capacity would generate more revenue. However, it has been argued that the additional fee should be charged only on the shared band and not on the entire spectrum band held by licensees.

It seems TRAI has seen some virtue in this argument. At the moment, it is not possible to monitor how much spectrum is being shared at each site and segregate the adjusted gross revenue (AGR) on a site-by-site basis. Thus, the licensees are assumed to be sharing the entirety of their spectrum in the specific band.

However, the Indian Department of Telecommunications (DoT) has received requests that the additional SUC should only be charged for the spectrum bands that are being shared. In other words, SUC may have been – incorrectly – charging for operators’ entire spectrum holdings, which would mean that frequencies that they had not been permitted to share have been included.

There is also the argument that if carriers are already paying a fee on the spectrum they own they might not want to pay more to share spectrum. Spectrum sharing is something many regulators want to encourage, so this could be a retrograde step.

TRAI has asked for stakeholder comment on all these points in the consultation paper on spectrum sharing fees it published last week. The last date to submit comments on the paper is 20 May 2020; counter comments should be submitted by 3 June 2020.

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