'All telcos but RJio for uniform SUC; 4.5% charge too high'

All telecom companies except Reliance Jio Infocomm have favoured a uniform spectrum usage charge (SUC) but keeping it at proposed 4.5 per cent will be an additional burden for the industry, Cellular Operators Association of India (COAI) said.
Citing a study by Deloitte, the COAI, representing players like Airtel, Vodafone, Idea Cellular, said reducing SUC by 1 per cent can increase GDP by about Rs 1.76 lakh crore and reduce number of people below poverty line by 4.7 per cent.
"It is submitted that except for one of the Telecom Service Providers, the entire industry strongly believes that a uniform fee would not only result in a level playing field but will also remove the ambiguities, arbitrages and their misuse," COAI Director General Rajan S Mathews said in a letter to Telecom Secretary J S Deepak.

Reliance Jio is also a member of COAI but has a different view on the matter, it added.
Telecom operators provide mobile services using various spectrum bands -- 800 Mhz (2G,4G), 900 Mhz (2G,3G, 4G), 1800 Mhz (2G,4G), 2100 Mhz (3G), 2300 Mhz (4G) and 2500 Mhz (4G).
According to a source, technical committee at Department of Telecom has suggested to levy 4.5 per cent uniform SUC on all operators as it is not possible to ensure their earning from any particular spectrum band for service like 4G.

The present level of SUC collection by government is around 4.69 per cent of revenues earned by companies from mobile phone services.

Inter-ministerial panel Telecom Commission (TC) has decided to take legal opinion on the issue and discuss it along with the technical committee report in the next meeting.
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Telecom companies are facing rising network congestion in circles with high data consumption (mainly metros and Category A circles, which account for 60 per cent of India's data traffic), CRISIL Research said.
It added that consequently, the entire spectrum in the 2300 MHz band, about 80 per cent in 1800 MHz and over 60 per cent in 2500 MHz, which can be used to offer 4G services, were bought.
There were also bids for spectrum in 2100 MHz, largely used for 3G services, mainly in select low-data-penetration markets (Category B and C circles).

"Operators clearly intended to ramp up their 4G and 3G spectrum holdings at minimal upfront cost, given the significant debt overhang (industry debt approximately Rs 4 lakh crore as of March 2016). Unlike the previous auction, there was no business compulsion to acquire spectrum this time," Prasad Koparkar, Senior Director at CRISIL Research said.
He added that Vodafone and Idea -- who are said to have bid aggressively during the auctions -- had to augment their spectrum holdings and network capacity to cater to burgeoning growth in data traffic and compete with Reliance Jio.
Reliance Jio purchased 214 MHz of airwaves and paid Rs 13,672 crore.

Kotak Institutional Equities, in a report, said the agency hoped that this is the last mega spectrum auction in the industry for a while and that the focus would shift to monetising the massive data spectrum investments made in the past few years.
According to CRISIL, bidding was most aggressive in Mumbai, Bihar, UP (East) and Gujarat circles.
"Cumulatively, we expect the top 3 telcos, which cumulatively account for three-fourth of the sector revenues, to spend around Rs 80,000 crore in network capex over the next 2 years, which is 25 per cent higher than the aggregate network capex in the previous two fiscals," CRISIL Research Director Ajay Srinivasan said.

This comes at a time when profitability and operational cash flows are expected to come under pressure with the launch of Reliance Jio's services.
"That, in turn, will increase reliance on external funding. A case in point is Vodafone Plc's recent decision to invest Rs 47,700 crore in its Indian arm to reduce debt and increase investment wherewithal," Srinivasan said.