MDDT to determine tariffs for use of radio frequencies on new methodology
The Ministry of Digital Development and Transport (MDDT) will determine tariffs for the use of radio frequencies based on a new approach and methodology.
It should be noted that on 26 August 2022, by Decree No.1834 of the President of the Republic of Azerbaijan, changes were made in Decree No.277 of the President of the Republic of Azerbaijan on the application of the Law of the Republic of Azerbaijan “On Telecommunications” dated 9 August 2005. Under the new Decree, the authority to determine tariffs for the use of radio frequencies was transferred to the Ministry of Digital Development and Transport in coordination with the Ministry of Economy and the Ministry of Finance.
To date, payment for the use of radio frequencies has been made on the basis of tariffs approved by Minutes No.09 of the Tariff (Price) Council meeting of 23 July 2004. These tariffs did not take into account the importance of the radio spectrum, the number of frequencies, the amount of bandwidth used, the geographical area and other factors, which created a number of difficulties in regulating the use of radio frequencies through economic instruments and in using radio frequencies effectively. Also, the failure to take into account rapidly evolving technological trends over the past 18 years since the tariffs were adopted has itself led to serious problems and litigation in the application of radio frequency tariffs.
In order to ensure the implementation of the mentioned Decree of the President of the Republic of Azerbaijan and bringing existing tariffs for radio frequencies into line with international standards, the “Methodology for calculation of one-time fee and fixed-term fee (monthly or annual) for usage of radio frequency spectrum in the Republic of Azerbaijan” was developed, agreed with relevant bodies, approved by decision #KQ -10/22 of the MDDT board on 19 September 2022 and registered in the State Register of Legal Acts of the Republic of Azerbaijan.
The methodology is developed on the basis of the recommendations of the International Telecommunication Union (ITU) for calculating fees for the use of radio frequencies, as well as the experience of a number of countries.
The new tariff methodology takes into account the technology used by radio-electronic means tuned to allocated radio frequency bands, the degree of importance of radio frequency bands, the number of radio frequency nominations and bandwidth, the geographical area in which the allocated radio frequency is used, and the calculation of one-time and term (monthly or annual) payments based on the number and factors characterizing the radio frequency band, including the constant cost factor.
The current tariffs were not based on the volume (width) of the radio frequency band, but on the number of radio-electronic devices (REDs) used on that frequency. Therefore, in some cases users were interested in paying less by hiding the number of REDs installed and avoiding payment for unauthorized REDs use. The new methodology takes the volume (width) of the radio frequency band as the basis and thus solves this problem. A tariff calculator has also been developed so that frequency users can calculate in advance, in a transparent manner, the fees they will pay for the use of frequencies.
The new methodology also applies the geographical area coefficient, which will contribute to the development of wireless radio communication services in the regions and eliminate the digital divide in the use of technology. Thus, users will be able to use radio frequencies 25% cheaper in the regions and 2.6 times cheaper in the liberated territories than in Baku, Sumgait and Absheron district.
According to the Presidential Decree, the new tariff methodology for the use of radio frequencies by MDDT encourages the use of new technologies in this area, promotes the efficient use of radio frequencies, improves service levels and regulates demand for radio frequencies in accordance with the principles of equity and customer satisfaction.
