With less than a month left in the spectrum auction, the inter-ministerial panel Telecom Commission (TC) is likely to meet on Wednesday to finalise its views on levying a uniform spectrum usage charges (SUC).
As per official sources, “TC would discuss all the possible options and announce their final decision as to what would the uniform SUC levied on telecom operators. TC might keep the SUC on broadband wireless access (BWA) unchanged, at one per cent while for mobile operators might impose a uniform charge of 3- 5 per cent.”
After its meeting on January 7, Telecom Secretary M F Farooqui said, “Telecom Commission discussed the matter (spectrum usage charge) but it needs further deliberations.”
The official source also stressed that the Department of Telecommunications (DoT) is willing to have a TC’s decision before the spectrum auction begins. Source added, “Getting TC’s recommendation on SUC prior to the spectrum auction is quite important as all the telecom operators are going to decide whether to participate or not based on the commission’s decision.”
The next step would be to forward the views of TC to the Empowered Group of Ministers (EGoM) on telecom, headed by Finance Minister P Chidambaram, which will take a call on it. The EGoM could also determine whether their decision will need a final approval from the Cabinet.
In the beginning, the Telecom Regulatory Authority of India (Trai) had recommended levying a uniform SUC of 3 per cent of the revenues earned by mobile operators from April 1, 2014 and keeping the upper limit of SUC at 5 per cent.
After that, DoT submitted few more proposals along with the Trai recommendation infornt of the TC, which after last week’s meeting said that they might explore additional options for a revenue neutral regime.
levied annually by the government, SUC varies from 3-8 per cent for mobile service providers and 1 per cent for holders of BWA spectrum that can be used for 4G services. If a uniform SUC is implemented as recommended by Trai, mobile operators such as Airtel, Vodafone and Idea would be benefited the most. While a uniform SUC would adversely impact Reliance Jio Infocomm ltd (RJIl) which currently holds the BWA spectrum at one per cent SUC.
DoT in the last week has been sandwiched as GSM players have been busy demanding implementation of uniform SUC while RJIl has opposed uniform SUC saying it would illegal. RJIl has already written couple of letters to Telecom Minister Kapil Sibal stating that a flat fee will disturb the level-playing field for incumbent operators and new entrants.