As demand for uniform spectrum usages charges (SUC) picks up from operators, the inter-ministerial body Telecom Commission (TC) is expected to meet on January 7.
Talking about the scheduled meeting, a source said, “The main focus of the meeting would be to discuss and finalise the proposal of levying uniform annual SUC across all players in the sector. Commission would then forward its recommendations to the Empowered Group of Ministers (EGoM) on telecom, headed by Finance Minister P Chidambaram, for its final decision on the matter.”
Apart from that, the source stressed that along with discussing the original recommendations given by the Telecom Regulatory Authority of India (Trai), TC would also be considering other options which are being prepared by the Department of Telecommunications (DoT) committee. “DoT committee is likely to submit five more proposals infront of the TC for its considerations,” the source added.
The new proposals crafted by DoT committee include, acceptance of charging 3 per cent SUC recommended by Trai starting with the purchase of airwaves in the upcoming auction. It is of the view that in this case there should be no change in existing slab rate if telecom companies buy additional spectrum.
Further, the proposed upper slab rate under this scenario is 5 percent and SUC for broadband wireless access (BWA) spectrum is to be raised to 3 per cent from existing 1 per cent, the DoT panel is learnt to have said. If this option is accepted by the Government then revenue from six licences that are expiring in 2014 will be reduced to Rs 226 crore from Rs 426 crore that they paid in 2011-12 under the existing rates.
In other scenario, the DoT committee has suggested levying 3 per cent SUC on spectrum being put for auction and fixing the upper limit at 6 per cent without increasing SUC applicable on BWA airwaves. Under this option, the SUC on BWA will be increased to 3 per cent from one per cent at present on any further acquisition of such airwaves, sources said.
Along with it, a slight modified version is also going to be tabled as per which the upper limit would be fixed at 5 per cent. In the fourth option, the committee has suggested keeping SUC at 3 per cent, BWA spectrum SUC at 1 per cent and with other type of spectrum at 3 per cent. In the fifth scenario, the committee has suggested levying 3 per cent SUC for standalone auctioned spectrum and a fee of 1 per cent for BWA unless combined with other airwaves.
In the sixth scenario, the committee has suggested charging SUC at 5 per cent on all spectrum including that acquired through auction. Source said at the present 6 per cent SUC slab rate, the revenue is estimated to be at Rs 1,370 crore while the CAGR is at 8.29 per cent.
levied annually by the Government, SUC at present 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. The uniform SUC, if implemented as per recommendations made by Telecom Regulatory Authority of India, will provide relief for mobile operators such as Airtel, Vodafone and Idea, but will increase rates for BWA spectrum holders including Reliance Jio Infocomm ltd (RJIl).
However, source said that all the options drawn up by the DoT can have legal implications which are being examined. While GSM players like Airtel, Vodafone, Idea Cellular and Uninor have been demanding implementation of uniform SUC, RJIl has opposed any such move. RJIl has opposed changes in existing SUC rates and said, “any post facto deviation in auction rules which extends undue benefit to incumbent operators will not stand judicial scrutiny.”