COAI seeks uniformity in usage charge at 3% for all airwaves

GSM industry body COAI has sought uniformity in the rate of spectrum usage charges (SUC) at 3 per cent of adjusted gross revenue for all assigned airwaves and bring it further down to 1 per cent in a phased manner.
According to sources, the Telecom Commission has agreed to reduce the SUC charge to 3 per cent from 5 per cent of adjusted gross revenue on spectrum that will be purchased in next round of auction. It will be sent to the Cabinet for final approval.
Quoting reports, COAI said, "We welcome this proposal ...Given the adverse impact of SUC levy on spread of service, it is requested that there is an urgent need to reduce SUC rate for all existing spectrum assigned to operators to a low and uniform rate across bands and technologies."

The industry body has written to Department of Telecom (DoT) and Telecom Regulatory Authority of India (Trai), pressing its demand on SUC.
COAI said numerous SUC rates are presently applicable for spectrum assigned at different points time, which leads to ambiguities while entering into transactions like M&A, spectrum trading and sharing and liberalisation.
COAI has sought to "change SUC at a uniform rate of 3 per cent for all spectrum and further reduce it in a phased manner to uniform rate of 1 per cent."

SUC were earlier linked to quantum of spectrum holding of an operator in range of 3-8 per cent of their adjusted gross revenue.

After evaluating impact on the exchequer, government in January 2014 decided to cap SUC at 5 per cent on spectrum that were to be procured in future auction. The SUC collection was at 4.8 per cent level that time.
Existing telecom operators were asked to pay the weighted average of their existing SUC (on old rate of 3-8 per cent), and 5 per cent if they acquire new spectrum.
Trai has recommended to charge SUC at uniform rate of 3 per cent across the industry.
However, the recommendation faced stiff opposition from Reliance Jio which holds pan India broadband wireless access spectrum on which 1 per cent SUC is imposed.

The government had then asked all BWA holders, including Aircel, Airtel, to continue paying 1 per cent on BWA but they were asked to pay 5 per cent of adjusted gross revenue on all spectrum they will purchase in future.