Telecom Commission to meet on Jan 25, EGoM on Jan 27

Trai had suggested levying uniform SUC of 3 to 5% from April 1 for all telecom services

Two high level panels-- Telecom Commission and Empowered Group of Ministers -- are scheduled to meet on January 25 and 27 respectively to take call on all pending issues that will decide the fate of upcoming spectrum auction.

"Telecom Commission is scheduled for January 25 and EGoM for January 27," an official source told PTI. Eight telecom service providers, including 7 GSM operators have applied to participate in spectrum auction scheduled to start from February 3, compared to none in March auctions and only five in November 2012 auctions, indicating huge interest from them to buy airwaves.

Applicants include Reliance Jio Infocomm, Vodafone, Airtel, Aircel, Tata Teleservices, Idea Cellular, Telewings (Uninor) and Reliance Communications. All these companies are looking for clarity on many issues mainly spectrum usage charges which is levied annually as a percentage of revenue earned by telecom companies and varies from 3-8%.

It is also one of the main sources of government revenue from the sector. GSM players and RJio have locked horns on this matter. GSM players -- Airtel, Vodafone, Idea Cellular and Uninor-- have demanded implementation of telecom regulator Trai's recommendations while RJio is against any change in existing regime on already allocated airwaves.

The Telecom Regulatory Authority of India's (Trai) suggested levying a uniform SUC of 3 to 5% from April 1 for all telecom services. If the recommendations are accepted, it would increase the burden on companies that hold broadband wireless access spectrum, including RJio, which are required to pay SUC at the rate of 1%.

About 403 megahertz of 2G spectrum in the 1800 MHz band and 46 MHz of spectrum in the premium 900 MHz band is being put up for auction. Overall, the government has set a revenue target of Rs 40,874.50 crore which includes Rs 11,343 crore upfront from auctions in this fiscal. Together, the 900 MHz and 1800 MHz band airwaves being auctioned are valued at about Rs 48,685 crore.

Last date for withdrawal of application by companies is January 27- the day when EGoM meets. Meanwhile, bank guarantee provided by leading telecom companies indicate fierce competition in spectrum auction, specially for 900 Mhz band airwaves, which is considered twice more efficient than 1800 Mhz band, but government decision will be key to set mood of bidders.