DoT draws up six scenarios for annual spectrum fee impact

The DoT is likely to place before inter-ministerial panel Telecom Commission six different scenarios based on probable revenue impact for the exchequer that are linked to changes in annual fee to be paid by companies on spectrum usage.
The Department of Telecom (DoT) committee, which examined TRAI's recommendations, stated that after "deliberating on the matter (uniform spectrum usage charge) in totality, a revenue neutral SUC rate may be determined," sources said.
Levied annually by the government as a percentage of revenue earned by mobile operators from telecom services, SUC varies from 3-8 per cent.
The Telecom Regulatory Authority of India (TRAI) has recommended implementing a uniform SUC of 3 per cent from April 1, 2014 and keeping the upper limit of SUC at 5 percent.

The uniform SUC, if implemented as per recommendations made by Telecom Regulatory Authority of India, will provide relief for mobile operators such as Airtel, Vodafone and Idea, but will increase rates for broadband wireless access (BWA) spectrum holders including Reliance Jio Infocomm Ltd (RJIL).
The scenarios proposed to be placed before TC include acceptance of charging 3 per cent SUC recommended by Telecom Regulatory Authority of India starting with the purchase of airwaves in the upcoming auction. It is of the view that in this case there should be no change in existing slab rate if telecom companies buy additional spectrum.

Further, the upper slab rate under this scenario is 5 per cent and SUC for BWA spectrum is raised to 3 per cent from existing 1 per cent, the DoT panel is learnt to have said.

If this option is accepted by government then revenue from six licences that are expiring in 2014 will be reduced to Rs 226 crore from Rs 426 crore that they paid in 2011-12 under the existing rates.
In other scenario, the DoT committee has suggested levying 3 per cent SUC on spectrum being put for auction and fixing the upper limit at 6 per cent without increasing SUC applicable on BWA airwaves.

Under this option, the SUC on BWA will be increased to 3 per cent from one per cent at present on any further acquisition of such airwaves, sources said.
If this goes through, the financial implication would remain same on the 6 licences expiring in 2014. However, revenue accruing to the government by increasing charges on BWA spectrum have not been estimated yet.
The third option worked, a minor modification of the second scenario, is fixing the upper limit at 5 per cent.
In the fourth option, the committee has suggested keeping SUC at 3 per cent, BWA spectrum SUC at 1 per cent and with other type of spectrum at 3 per cent.

In the fifth scenario, the committee has suggested levying 3 per cent SUC for standalone auctioned spectrum, a fee of 1 per cent for BWA unless combined with other airwaves.
In the sixth scenario, the committee has suggested charging SUC at 5 per cent on all spectrum including that acquired through auction.