Any change in spectrum use charge will be illegal: Reliance Jio

Reliance Jio's move comes within a week of Bharti Airtel, Vodafone India, Idea Cellular and Uninor demanding a flat SUC, as recommended Trai

Any attempt at changing the spectrum usage charge (SUC) regime for the spectrum already allocated is illegal, as it extends undue benefit to the incumbent operators, Reliance Jio Infocomm said on Monday, a day before the Telecom Commission is to meet to decide whether to adopt SUC.

In a letter to Department of Telecommunications (DoT) Secretary M F Farooqui, also chairman of the Telecom Commission, the Mukesh Ambani-led company reiterated its stand opposing introduction of a flat SUC.

Reliance Jio’s move comes within a week of Bharti Airtel, Vodafone India, Idea Cellular and Uninor demanding a flat SUC, as recommended by the Telecom Regulatory Authority of India (Trai), be introduced before the forthcoming auction as operators need to factor in the SUC before bidding.

Reliance Jio has sent a copy of the letter to Kapil Sibal, minister, communications and information technology; Sindhushree Khullar, secretary, Planning Commission; Arvind Mayaram, secretary, department of economic affairs; Saurabh Chandra, secretary, department of industrial policy and promotion; and other members of the Telecom Commission.

If flat SUC is introduced, it will impact Reliance Jio as it will have to shell out more. Trai has recommended a flat SUC at three per cent of the operators’ revenue, while Reliance Jio pays only one per cent of revenue, as it only holds broadband wireless access (BWA) spectrum. “Unilateral increase in SUC for BWA from one per cent to three per cent will be illegal,” Reliance Jio said in the letter.

At present, operators pay between one and eight per cent of revenue as SUC depending on their spectrum holding. The GSM operators have backed Trai suggestions of a flat SUC as their collective payment as SUC will come down.

Reliance Jio said it will result in windfall gains to incumbents such as Bharti Airtel, Vodafone India and Idea Cellular, and loss to the tune of “thousands of crores” to the exchequer, which is “without any justifiable reason”.

An internal committee of the DoT, too, had opposed Trai recommendations. The Telecom Commission had also said earlier the ministerial panel would need to discuss the issue with the finance ministry before taking a final call.