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Telecom companies, barring Reliance Jio, on Friday told the Department of Telecom that there should be a flat spectrum usage charge of three per cent of annual revenues for all operators.
In the pre-bid conference for the forthcoming spectrum auctions, held here today, nearly all the telecom operators expressed concern over the anomalies resulting from the existing slab-wise charging of spectrum charges.
3% Uniform fee Telecom companies are required to pay between one per cent and eight per cent of the annual revenues depending on the quantum of spectrum they own. TRAI, however, has recommended collecting a uniform fee of three per cent.
Rajan S. Mathews, Director-General, COAI said, “Failure of the DoT to clarify if they will be able to take a decision on the implementation of a flat charge will be near fatal to the success of the upcoming auctions.”
If the existing slab-based charges continue, it will act as a deterrent for any operator to acquire more spectrum whether through auctions, mergers or spectrum sharing.
The industry was hopeful that the DoT would correct the discrepancies in the current practice of levying spectrum usage charge and consider a flat SUC as opposed to an escalating charge. However, in the pre-bid conference held today, the DoT gave no indication that the issue would be addressed before the auction date.
Industry body Assocham has also urged the Government to implement uniform SUC before the forthcoming auctions.
“None of the spectrum reforms being introduced by the government like spectrum sharing, spectrum trading, revised mergers and acquisitions (M&A) guidelines will take off until there is a uniform SUC regime as the operators will be discouraged to purchase spectrum if the SUC continues at the current escalated regime,” Assocham said.
opposed by Reliance Jio “The concerns of the telecom department that uniform charges may cause a loss of Rs 2,500 crore to the government exchequer over 10 years, i.e., Rs 250 crore per year, are incorrect and would actually lead to serious disadvantages to the nation, including huge financial losses,” said the chamber.
Reliance Jio is the only major player which has opposed the flat fee regime. That’s because Reliance had won broadband spectrum in 2010 and the Government had then fixed a charge of only one per cent. Moving to a flat regime would mean Reliance would have to start paying three per cent. The company has termed this illegal because it goes against the rules announced at the time of buying spectrum three years ago.
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