Telecom panel may accept Trai?s proposal for uniform SUC

The telecom commission is likely to accept sector regulator Trai’s proposal for a flat and uniform spectrum usage charge (SUC) for 2G radiowaves, at its meeting on Saturday. It will also discuss three alternatives for broadband spectrum usage fee.

The first option suggests raising the SUC charge for BWA spectrum, currently at 1 %, to 3%, similar to that of 2G spectrum.

The second option says BWA spectrum sold through the auction in 2010 can continue to attract an SUC of 1% and will be ?reported separately?. This spectrum will not be added with any fresh spectrum bought by a telecom company for calculating the use charges.

The last option suggests the spectrum fee should be a weighted average of 2G spectrum at 3% (bought in 2014 auctions) and 4G spectrum at 1%. For instance, under this option, if Reliance Jio that holds pan-India 4G spectrum, acquires 5 Mhz of 2G spectrum in the current auctions at the rate of 3%, the weighted average rate would be 1.67%.

The panel’s decision will have a bearing on the bids for spectrum sale that begins on February 3.

Earlier this month, the department of telecom (DoT) sought legal advice on its tentative decision to fix a flat spectrum charge instead of the current graded system, where the fee ranges from 3-8% of an operators’ annual revenues depending on the amount of spectrum held. Usage charges for companies that offer 4G services, or high-end data services on mobile phones, is 1% of their annual revenue from this platform.

The industry is divided on the issue. While GSM operators Bharti Airtel, Vodafone, Idea Cellular and Uninor have sought a flat and uniform spectrum usage charge, Mukesh Ambani-controlled Reliance Jio is opposed to any change in the current regime. Dual technology operator Reliance Communications has even argued that a flat spectrum usage charge will lead to loss of R50,000 crore to the exchequer.

GSM operators have, however, told the department of telecom (DoT) that the absence of a flat SUC is likely to discourage the industry from buying additional radiowaves either through auction or sharing process.

Telecom companies have also asked DoT provide clarity on the issue before January 27 which is the last date for withdrawing applications to bid in the upcoming auction. Eight telecom operators, including Vodafone, Bharti Airtel and Reliance Jio Infocomm, have applied to bid for the spectrum

auction.