Reliance Jio Infocomm Ltd (RJio) has locked horns with industry body Cellular Operators Association of India (COAI) on spectrum usage charges (SUC) and has termed many of the issues raised by the latter as “frivolous”.
RJio, which is incidentally a core COAI member, also alleged that COAI’s contention on SUC is “misplaced, legally untenable and devoid of any logic”. Alleging that COAI was trying to mislead the government, the company said the industry body’s views are not necessarily that of all its members.
RJio, the wireless arm of Reliance Industries Ltd (RIL), has also urged the Centre not to amend SUC rates post auctions and discovery of market determined price. It would not be commercially rationale to alter SUC rates, it said, adding that this would also undermine the credibility of the auction process.
If the Centre accepts COAI’s demand for uniform SUC at 3 per cent, this reduction in SUC for already allocated spectrum will result in cause “huge” loss to the exchequer. Further, it would also give “undue benefits” to incumbent operators, it said.
The operator has opposed the industry body’s suggestions in a letter addressed to JS Deepak, Chairman (Telecom Commission) & Secretary (Telecom).
“The government should not implement any ex-post facto change in the terms and conditions for operators, especially on the basis of which open and transparent auctions have been conducted and spectrum value has been established,” the letter dated April 21 said.
An escalating SUC regime, which at present varies from 3-8 per cent of adjusted gross revenue (AGR), was specified by DoT to recover fee for spectrum, which was allocated without any upfront consideration, it added.
“COAI is proposing that the incumbent GSM operators should be able to enjoy the benefits of additional spectrum without paying for it…,” RJio alleged in the letter.
Earlier this month, COAI sought to start with SUC at a uniform rate of 3 per cent for all spectrum, which may be further reduced to 1 per cent in a phased manner. The letter was written by COAI Director-General Rajan S Mathews.