DOT Removes 3% Floor Rate on 5G Spectrum Usage Charges

DOT Removes 3% Floor Rate on 5G Spectrum Usage Charges

In a major relief to the telecom companies, the Department of Telecommunications (DoT) has removed the floor rate of 3 percent on 5G spectrum usage charges. According to industry, telecom companies were demanding removal of floor rates.

The Department of Telecom issued a new order late on Tuesday, which did not mention the floor rate of three per cent. This means that this rate has been removed.

The Cellular Operators Association of India has welcomed this order of DoT. Association’s DG Lt. Gen. Dr. S. P. Kochhar said that this order will bring clarity to the telecom companies about the upcoming auction.

The Union Cabinet on June 15 approved the proposal of the Department of Telecommunications to conduct spectrum auction through which spectrum will be handed over to successful bidders for providing 5G services to the public and enterprises.

The auction will be conducted for spectrum under various (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands.

For the first time, there is no mandatory requirement to make advance payment by the successful bidders. The payment for spectrum can be made in 20 equal annual installments to be paid in advance at the beginning of each year.

This is expected to significantly reduce the cash flow requirements and lower the cost of doing business in the sector.

The bidders will be given an option to surrender the spectrum after 10 years without any future liabilities in respect of the remaining instalments.

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