Cellular operators call for flat SUC

The Cellular Operators’ Association of India (COAI), in a letter to the Department of Telecommunications (DoT), has called upon the government to accept the recommendations of the Telecom Regulatory Authority of India (Trai) and introduce a flat spectrum usage charge (SUC) before the forthcoming auction.

COAI said Trai had very clearly and unambiguously advocated the principle of uniform spectrum usage charges, while leaving it to DoT to determine the exact rate of such uniform charges.

COAI said Trai had very clearly and unambiguously advocated the principle of uniform spectrum usage charges, while leaving it to DoT to determine the exact rate of such uniform charges.

The association has also noted if there was no flat SUC, it would discourage purchase of spectrum and distort the outcome of the spectrum auctions. However, any lowering of SUC would get factored into the business case of operators, leading to higher upfront bids, COAI said.

If DoT decides not to move towards uniform SUC that would cause further irreparable loss to the government exchequer, as it would discourage the purchase of spectrum, among other issues, COAI said in its letter to Farooqui.

Meanwhile, the Union cabinet has asked DoT to finalise the revised structure of the SUC before it conducts the next round of auction in January.

Earlier, the Telecom Commission had stated it would take a decision on the proposed uniform SUC after consulting with the finance ministry. The government has said it would follow the existing rules of SUC for the upcoming auction, unless it manages to take a final decision on the issue before auction.

Trai had recommended uniform SUC at three per cent for all operators. An internal committee of the DoT has opposed the proposal of uniform SUC.

Operators currently pay between one and 8% of their revenue as SUC depending on the quantum of spectrum they hold. Companies like Reliance Jio, holding broadband wireless access (BWA) spectrum, have repeatedly deliberated against the uniform SUC at three%, as it would increase SUC for BWA spectrum holders who now pay just one% of revenue.

The country’s second largest mobile carrier, Vodafone India, has recently said the slab-based spectrum usage charges may result in “stifle participation” in the coming auction.