The Department of Telecommunications (DoT) has decided to levy varying rates for spectrum usage for spectrum in different bands. While telecom companies holding spectrum in the 2300 MHz band will be required to pay 1 per cent of their annual revenue as the spectrum usage charge, operators using other spectrum in other bands, including 900 MHz and 1800, MHz will have to pay 5 per cent as the usage charge. This is line with DoT’s announcement during spectrum auctions in 2010 to charge one per cent as usage charge from the holders of spectrum in the 2300 MHz band. DoT was of the view that such a move would enable telecom operators to offer affordable broadband services. However, with technological advancements and spectrum liberalisation, operators can now offer broadband services on other spectrum bands, including 900 MHz and 1,800 MHz as well.

With different usage charges for spectrum in different bands, the challenge is now to ensure that operators do not load up higher revenues on the band carrying a lower charge. To address this, the DoT has put the onus of revenue separation on the operators who will be liable to put in place a system of independently monitoring and verifying the revenue earned from broadband frequencies to prevent revenue misrepresentation.