EGoM to decide on spectrum fees, telecom M&A rules today

Inter-ministerial panel Telecom Commission on Saturday recommended three options for levying annual SUC on telecom operators

The Empowered Group of Ministers on telecom, headed by Finance Minister P Chidambaram, is likely to take a final call on the contentious issue of spectrum fee and long-awaited mergers and acquisitions norms.

“EGoM will meet on Monday. Hopefully, a final decision should be taken on spectrum usage charge. Merger and acquisition guidelines are almost ready but were not released pending a legal opinion. A final decision is also expected on the same,” an official source said. Meanwhile, the department of telecom has extended the last date to withdraw applications for the coming spectrum auction to Tuesday from Monday earlier. The inter-ministerial Telecom Commission on Saturday recommended three options for levying annual spectrum usage charge on telecom operators.

GSM firms such as Bharti Airtel, Vodafone and Idea Cellular have locked horns with Mukesh Ambani-led Reliance Jio Infocomm following the TRAI's recommendation of a uniform SUC. The charge is levied annually by the government as a percentage of revenue earned from telecom services. It currently ranges from 3 to 8 per cent for mobile operators, while for firms with Broadband Wireless Access (BWA) spectrum such as Reliance Jio Infocomm Ltd and Tikona, the fee is 1 per cent. Sources said the panel is learnt to have worked out three options for the SUC on BWA spectrum.

One of the options is levying the weighted average of 1 per cent on BWA and 3 per cent when combined with other sets of airwaves.

However, the Attorney General is understood to have advised against revising the BWA spectrum levy and has suggested that the government continue with the current rate of 1 per cent and not club revenue generated from any other set of airwaves. Eight telecom service providers, including 7 GSM operators, have applied to participate in the spectrum auction scheduled to start on February 3.

There were no bidders in the March auctions and only five in the November 2012 auctions, indicating huge interest in the forthcoming offer of airwaves. The applicants include Reliance Jio Infocomm, Vodafone, Airtel, Aircel, Tata Teleservices, Idea Cellular, Telewings (Uninor) and Reliance Communications. The matter is crucial for the spectrum auction scheduled to start on February 3, from which the government expects to raise at least Rs 11,300 crore to curb the fiscal deficit.     The EGoM will also consider the Telecom Regulatory Authority of India's recommendation for a uniform spectrum usage charge (SUC) of 3 to 5 per cent from April 1 across the sector.