“The incumbent GSM operators want to enjoy all the benefits of additional spectrum without paying a single penny to the exchequer.”

A war of letters between Reliance Jio and GSM players over spectrum usage charge (SUC) intensified with the former shooting off a fresh note to the Department of Telecom (DoT).

The letter, the second by Reliance Jio over the past week, attacked the Cellular Operators Association of India for allegedly making factually incorrect and misleading statements.

“The GSM operators are using coercive measures to pressurise the Government to implement a uniform SUC regime by giving various false and misleading statements so that they do not have to pay the escalated SUC for the spectrum holdings held by them irregularly in excess of their contractual right. The incumbent GSM operators want to enjoy all the benefits of additional spectrum without paying a single penny to the exchequer.

“They want to retain the spectrum in excess of what is permitted by their licences and they neither want to pay the one time spectrum charge nor pay escalating spectrum usage charge for the excess spectrum held by them,” Reliance Jio said in its letter to DoT.

The company urged the Government to take a firm stand on this matter.

“If these operators are not willing to pay higher slab-based spectrum usage charge for the spectrum allocated to them administratively, such excess spectrum should be withdrawn from these operators,” it said.

Divisive Debate

The ongoing debate over spectrum usage has divided the industry.

While incumbent GSM players are in favour of moving to a uniform rate, Reliance Jio wants the existing escalating system wherein operators pay higher charges for holding a higher quantum of spectrum.

Some of the incumbent operators had urged the Government that if implementation of a flat SUC is not immediately possible, LTE (long term evolution) technology across all spectrum bands should attract the same SUC charge.

In response, Reliance Jio said such demands can never be justified on technical or economic grounds.

“The present proposal of incumbent operators to bring down SUC would mean bringing down the spectrum usage charge for the bigger operators significantly.

“In addition to substantial revenue loss to the Government, a move to levy uniform flat fee will seriously disturb the level playing field between incumbent operators and new entrants and will drive out the new entrants out of the market,’ it said.

(This article was published on January 8, 2014)
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