With no clarity on SUC, Cabinet to take final call

DoT feels Trai formula will further complicate the matter

As the Telecom Regulatory Authority of India (Trai) has not given any specific recommendation on spectrum usage charge (SUC) and the matter continues to remain unresolved, the issue is likely to be placed before the Cabinet by the end of this month.

Trai has proposed a revised formula to include market-determined price and technical efficiency of the band for calculating weighted average in determining SUC but department of telecommunications (DoT) officials would further complicate the matter.

However, the DoT will deliberate on Trai’s suggestions at the inter-ministerial Telecom Commission, after which all the formulas will be placed before the Cabinet for final approval. DoT officials said applications will be invited only after the SUC issue is resolved. Telecom Minister Manoj Sinha has said spectrum auction is likely to commence in September and DoT is working hard to stick to the deadline.

Proposing a new formula to calculate weighted average regarding SUC, Trai has also said that ideally a flat rate should be levied. This, however, did not find many takers in DoT; the attorney general has also opined against it.

Officials in the department worried about operators approaching court if the matter was not resolved with a consensus. A higher SUC could also hamper the sentiment for the coming auctions. SUC, one of the many levies operators pay to the government, has been a bone of contention. Telcos have been asking for a uniform charge across bands, given the difficulty in calculating separate charges across bands, with multiple operators offering data services on various bands. The SUC varied from five per cent to one per cent across bands. The government gets Rs 8,000-8,900 crore annually from SUC.

GSM operators body Cellular Operators Association of India (COAI) has sought a uniform SUC at three per cent of adjusted gross revenue for all bands, and for existing and new spectrum. The body argued it would remove arbitrage. Reliance Jio Infocomm had argued the charge of one per cent should continue for the  2300-MHz band spectrum.

Telecom Commission had earlier decided an SUC of three per cent of adjusted gross revenue would be charged from mobile operators for spectrum acquired in the coming auctions, whereas a weighted average formula would be applied for calculating the SUC on the total spectrum holding for all bands.