Department of Telecom increases spectrum cap, installments for payments

In a step to relieve the financial stress on mobile operators, the Department of Telecom has increased the number of installments for spectrum payments from 10 to 16.

By: PTI | New Delhi | Published: March 20, 2018 2:07:46 pm

Department of telecom, spectrum payment cap, telecom sector debt, Reliance Jio, mobile operators, telecom spectrum cap, spectrum allocation, telecom companies, radiowaves cap The amendment is part of relief measures approved by the Cabinet early this month for the sector reeling under debt of Rs 7.87 lakh crore and suffering from reduction in margins due to cut-throat competition induced with entry of Reliance Jio. (File Photo)

The Department of Telecom has amended licence norms of service providers to increase number of instalments for spectrum payments and radiowaves frequency holding limit to provide relief to the sector reeling under deep financial stress.

“The Licensee may opt one time for higher number of instalments including in the current financial year 2017-18 (maximum 16 instalments) for deferred payment liabilities as per Notice Inviting Application (NIA) for auctions conducted for award of spectrum in the years 2012, 2013, 2014, 2015 and 2016,” a DoT note on licence amendment said. Before this amendment, a portion of spectrum auction amount used to be taken as upfront payment by Department of Telecom(DoT) and the balance, after a two-year moratorium, was paid out every year – 10 instalments in all.

The amendment is part of relief measures approved by the Cabinet early this month for the sector reeling under debt of Rs 7.87 lakh crore and suffering from reduction in margins due to cut-throat competition induced with entry of Reliance Jio. There will be no change in value and interest rate that telecom companies have to pay for the spectrum. The total amount that telecom operators will pay for the spectrum will be higher by Rs 74,446.01 crore till 2034-35 if they opt for more number of instalments. It will be optional for telecom operators to choose between current number of instalments and increased number of instalments.

“The instalments that have already been paid shall not be modified,” the note said. Before 2012, the DoT had held auction of 3G and BWA (Broadband Wireless Access) spectrum in 2010. The DoT has also amended spectrum holding limit of telecom operators as per the cabinet decision, which will provide exit route for loss making mobile service providers. “The overall spectrum cap is revised from the current limit of 25 per cent to 35 per cent,” the DoT note said. A telecom operator was earlier allowed to hold maximum of 25 per cent of all spectrum allocated in a service area for mobile telephony.

Department of telecom, spectrum payment cap, telecom sector debt, Reliance Jio, mobile operators, telecom spectrum cap, spectrum allocation, telecom companies, radiowaves cap The DoT will continue to use existing method to determine spectrum cap. (File Photo)

The new licence norms ends spectrum holding limit in and above frequency range of 1,000 megahertz band. However, the spectrum holding cap will remain in frequency range below 1 gigahertz. “The current intra-band cap is removed. Instead, there is a cap of 50% on the combined spectrum holding in the sub-1 GHz bands (700 MHz, 800 MHz and 900 MHz bands),” the note said. The DoT will continue to use existing method to determine spectrum cap. Under present norm, all spectrum, including allocated through auction, unsold in auction and surrendered by mobile operators, will be considered as total spectrum for calculating spectrum cap.

The spectrum that may be made available to DoT for commercial use by other ministries or departments as result of refarming will not be considered as part of total spectrum for determining radiowaves cap. The revised spectrum caps may be revisited after Final Acts of World Radiocommunication Conference (WRC) 2019, the note said.

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