RJio for uniform spectrum usage charge for future allotments

This is against the demand by Bharti Airtel, Vodafone and Idea Cellular to reduce SUC to a uniform level of one per cent for all spectrum holdings

Mukesh Ambani's Reliance Jio has asked the government to move gradually towards a uniform spectrum usage charge (SUC) for all allotments in the future and not for the spectrum given in the past. This is against the demand by Bharti Airtel, Vodafone and Idea Cellular to reduce SUC to a uniform level of one per cent for all spectrum holdings.

"Any reduction in the prescribed SUC for the spectrum that has already been allocated will cause loss to exchequer and extend undue benefit to the incumbent operators. There is no complexity or ambiguity in the computation of effective SUC for an operator with different SUC rates across spectrum bands," RJio said in a letter to the department of telecommunications (DoT).

Currently, spectrum usage charges are between three and eight per cent.

"Uniform spectrum usage charge will not only bring simplification, but also eliminate the possibility of arbitrage. Varied SUC rates can cause a lot of ambiguities while entering into transactions pertaining to mergers & acquisition deals, spectrum sharing and spectrum trading. Disparate rates can lead to disputes and create a non-level playing field and arbitrage," Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), had said last week in a letter to the DoT.

"All the operators and other stakeholders are able to compute the weighted average SUC rate, based on the applicable rate for each category of spectrum awarded and the quantum of spectrum in such category, without any difficulty. This is a simple mathematical computation and is done easily. SUC rates are clearly defined as evident from the clear and systematic tabulation done by COAI itself, thus there is no scope of misrepresentation by the operators," RJio said claims made by COAI in a recent letter to the department.

RJio said the government should not implement any 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. Both DoT and the Telecom Regulatory Authority of India have consistently held that as long as the SUC proposed to be levied is notified in advance, the market factors this into the spectrum valuation and the consequent auction bids.