SUC average should also apply to 3G spectrum: Airtel

Joining forces with Vodafone, Bharti Airtel has demanded that the weighted average approach for spectrum usage charge (SUC) should also be applied to 3G radiowaves.
It has gone a step further and said that all of its spectrum bands - 900 Mhz, 1800 Mhz and 2100 Mhz - should be collectively taken into account for calculating SUC average.
Airtel said the recent Cabinet decision confirms that SUC is to be calculated based on 'weighted average' of the stand- alone charge applicable for different types of spectrum (administrative and auctioned), and the "issue of revenue segregation between 2G and 3G spectrum is no longer valid".

In a letter to Telecom Secretary MF Farooqui today, the company said: "It is therefore just and fair that the same methodology of weighted average is also extended to 3G spectrum, and spectrum in 900, 1800 and 2100 MHZ bands is collectively taken into account while calculating the weighted average of SUC."
The Cabinet has approved SUC for new radiowaves at 5 per cent of the revenue of telecom operators; in case of combination of existing spectrum, a weighted average will apply.
"The spectrum acquired in the current auction will be charged at 5 per cent of the AGR. In cases of combination of existing spectrum in this band and spectrum acquired through the auction, the weighted average will apply to all the spectrum held by the operator in 900 MHz and 1800 MHz band," a government statement had said.

Yesterday, Vodafone too demanded that the weighted average approach for SUC be applied to the 3G radiowaves, which the company got in 2010.

Airtel also said that in 2010, at the time of 3G spectrum auction, the Department of Telecom prescribed a flat SUC of 3 per cent for stand-alone 3G operators.
"Due to challenges of revenue segregation between 2G and 3G, it was decided that SUC of 3G spectrum would be payable at the applicable rate of 2G spectrum," the company said.
SUC is levied annually by the government as a percentage of revenue earned from telecom services. It ranges from 3-8 per cent for mobile operators.