COAI concerned over spectrum usage charges after pre-bid meet

Telecom operators, at a pre-bid meeting here Friday for the upcoming spectrum auctions in January, have expressed concern over anomalies resulting from the slab-wise spectrum usage charges (SUC), the Cellular Operators' Association of India said.

"Failure of the DoT (Department of Telecom) to clarify if they will be able to take a decision on the implementation of a flat SUC, either before the date of issuing clarification on NIA (Dec 28, 2013) or the auction date, will be near fatal to the success of the upcoming auctions," said Rajan S Mathews, director general of COAI, the apex body for all GSM telecom players in the country.

The forthcoming auction, scheduled Jan 23, is expected to bring over Rs.40,000 crore into the government's kitty.

"COAI has strongly opposed the discriminatory SUC regime and fully endorses a uniform SUC of three percent of AGR for all operators offering voice and data services in the country as suggested by TRAI. The industry has time and again highlighted that the guiding principles governing the SUC must ensure that the total cost of spectrum is equitable for all TSPs (telecom service providers) across the entire period of the license," Mathews said in a statement here.

He said: "TRAI in its recent recommendations on SUC has correctly noted that the current policy of escalating charges, which is unique to India leads to anomalous results; creates a non-level playing field; penalizes larger operators; discourages mergers and represents a significant burden on the industry.

"In addition, we believe that it discourages the purchase of spectrum; perpetuates the inefficient use of spectrum; distorts spectrum auctions; skews technology choices and, ultimately, may result in lower revenues for the government."

"The industry was expecting that the DoT would correct the discrepancies in the current practice of levying SUC and consider a flat SUC as opposed to an escalating charge. However, in the pre-bid conference held today, the DoT gave no indication that the issue would be addressed before the auction date," the statement added.