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Sibal said, adding,"More investment is sector means more service and lower tariffs for consumers."
Major telecom operators including Airtel and Vodafone had written to the Department of Telecom to take a call on SUC before auction starts on February 3.
Govt cuts telecom spectrum fee for big carriers to spur bids
Telecommunication companies buying airwaves in an Indian auction next month will pay 5 percent of their revenue as an annual fee, a ministerial panel decided on Monday, a move that means lower payments for bigger carriers Bharti Airtel and the Indian unit of Vodafone .
The move scraps the 3-8 percent fee range the country currently levies in an effort to coax previously reluctant operators into taking part in India's third attempt at auctioning two frequency bands for billions of dollars.
The new rate is higher than the 3 percent flat rate suggested by an independent sector regulator, which had proposed abolishing the current levy of five different rates depending on the quantum of spectrum held by a carrier.
The government may lose some revenue it collects as annual fees due to the new rate, Telecommunications Minister Kapil Sibal said after the meeting of the ministerial group, but expects it to help companies buy more spectrum in the auction starting Feb. 3.
"No big losers, no big winners," Sibal said. "A successful auction means greater investment in the sector," he said, explaining the rationale for the new rate.
After two previous attempts to pull off the sale were boycotted by major mobile phone operators that complained minimum bid prices were too high, India cut sharply the floor bid price for the February auction, helping it lure interest from eight carriers including the market leaders.
That still did not guarantee a successful sale as carriers including Bharti and Vodafone demanded a cut in the recurring annual fee they pay on the top of the winning bid price for using airwaves. India expects to raise at least $1.8 billion this year from the spectrum auction.
"I think it's a mixed blessing. We are pleased that it's capped at 5 percent," said Rajan Mathews, director general at the Cellular Operators' Association