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Telecom panel leaves decision on spectrum charge to EGoM

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SummaryForwards all options to ministerial group, which meets Monday

With Attorney General Goolam E Vahanvati opining that the government cannot raise the spectrum usage charge on BWA spectrum holders from 1% of their adjusted gross revenue to 3%, the Telecom Commission (TC) on Saturday left the tough decision to the empowered group of ministers, which is slated to meet on Monday.

The Telecom Commission, which is an inter-ministerial panel of secretaries and the highest policy making body on telecom matters, forwarded all options zeroed in by it, as well as the

AG’s opinion to the EGoM for a final decision.

“No decision was taken today. All the options would be placed before the EGoM on Monday and they will take a final call,” said MF Farooqui, chairman, telecom commission, who is also secretary, department of telecom (DoT).

Farooqui added that a key parameter for deciding the new rate of SUC would be maintaining the government’s annual earnings from the SUC. In fiscal year 2012-13, the government earned a total of R5,689.88 crore from spectrum levy, an increase of about 10.5% from the previous fiscal.

The issue is rationalising spectrum usage charge before the auctions for 900 and 1,800 MHz, which commences from February 3. The Telecom Regulatory Authority of India had recommended that SUC for all auctioned spectrum be made uniform at 3%, while in cases of a mix between auctioned and administratively allotted spectrum, it be kept at 5%. Since GSM operators currently pay an escalating SUC ranging between 3-8% — the charge becomes higher as spectrum holding increases — they supported the recommendation. However, Reliance Jio, which won pan-India spectrum in 2.3 GHz in 2010 auctions for BWA services, opposed the move, as the SUC was then fixed at 1% for BWA services. The company raised the issue of violating contractual obligations.

Facing a tough situation, the TC, which last met on January 7 to take a call on the rationalisation of SUC, drew up three options to deal with BWA operators and sought a legal view on it from the AG.

The options were: SUC for spectrum acquired for BWA in 2010 auctions be raised to 3%; this be kept at 1% and be reported separately; and SUC for standalone BWA be kept at 1%, but if combined with spectrum bought in fresh auctions then the charge be the weighted average of acquired spectrum at 3% and BWA at 1%.

Vahanvati has ruled out the first and third options and said

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