DoT panel proposes separate revenue audit for broadband spectrum
04 Jul 2014
A technical committee set up by the Department of Telecom (DoT) has submitted a report proposing the introduction of an audit mechanism that would ensure that 4G operators correctly segregate revenues earned from broadband spectrum (2300 MHz) and other high frequency bands.
The move comes ahead of Reliance Jio's launch of its communications services.
The recommendations, if accepted, will have huge ramifications for operators such as Reliance Jio, which has a mix of spectrum in the 2300 MHz and 1800 MHz bands.
Reliance Jio and Bharti Airtel have argued that it is possible to separate all revenue earned from the 2300 MHz band and other frequency bands.
RJio pays a lower spectrum usage charge of 1 per cent of the annual revenue earned from services offered on the 2300 MHz band compared to an average of 5 per cent for other spectrum bands.
The DoT panel is worried that other players may load up higher revenues on the 2300 MHz band to take advantage of the lower spectrum usage charge.
The panel wants operators to put in place necessary mechanisms in their networks, billing systems and associated systems to monitor and segregate revenues earned from broadband wireless spectrum.
At the same time, the committee said the process of separating revenue between spectrum bands could be a complex task requiring constant audit and monitoring by the government.
The committee, in fact, listed at least eight instances where revenues earned by operators cannot be segregated at all. These include revenue from value added services, unused vouchers and bundled/combo tariff plans.
Even where income earned on different spectrum bands can be separated, DoT will have to put in place a fool-proof mechanism to ensure that the operators are not taking advantage of the arbitrage, the report said.
The panel also favours segregation of revenues based on the call detail records other than the caller IDs to rule out misreporting of revenues.
The spectrum usage charge for radio waves auctioned in February is 5 per cent while the spectrum usage fee for wireless broadband remains at 1 per cent. This has prompted DoT to ask operators to report revenues earned from broadband wireless spectrum separately.
Telecom operators utilising BWA frequencies in 2300 MHz band are required to report revenues earned from them separately.
