SUC average should apply to 3G specturm won in 2010: Vodafone

Ahead of spectrum auction next week, Vodafone India has demanded that the weighted average approach for Spectrum Usage Charge should also be applied to the 3G radiowaves which the company won in 2010.
Besies, it has said that going forward, SUC of 1 per cent should be levied on 2.1 GHz or 3G spectrum as there is virtually no distinction between the services being offered on 2.1 GHz and the Broadband Wireless Access (BWA).
Vodafone has also said that the SUC decision be formally notified as part of the notice inviting application (NIA), as it has some reservations on the effectiveness of the revised regime.

The Empowered Group of Ministers (EGoM) has decided that telecom operators will have to pay the weighted average of their existing SUC, and 5 per cent for new spectrum acquired.
SUC is levied annually as a percentage of revenue from telecom operators. For companies that hold BWA spectrum, Reliance Jio Infocomm Ltd and Tikona, the fee is 1 per cent.
EGoM did not approve the Telecom Regulatory Authority of India's suggestion for a uniform SUC of 3-5 per cent across the board, which would have increased charges for BWA players.

In a letter to Telecom Secretary MF Farooqui Vodafone India said that it has "some reservations on the effectiveness of the revised regime in fully addressing some of the fundamental underlying issues and concerns on the high level of SUC... (It is) earnestly requested that the details of the decision be notified formally as a part of the NIA".

The company said it seeks confirmation that in case of additional spectrum acquired in the forthcoming auction, 'the weighted average approach' will be applied to existing allocations.
Vodafone said the weighted average option was also considered by an inter-ministerial committee in 2008 when the issue of SUC for 2.1GHz/3G spectrum was being discussed.
"Now that the EGoM has approved this approach, it is only just and fair that the same approach be also extended to the 2.1GHz spectrum with effect from the date of allocation of such spectrum," the company said.
In case of stand-alone 2.1GHz or 3G radiowaves, the rate applicable for 3 per cent of adjusted gross revenue (AGR) under the NIA and using the weighted average approach, the existing holding would be charged at SUC rate as per the applicable slab and 2.1GHz would be at 3 per cent, it said.

"To illustrate, in case a service provider who was holding 6.2MHz 900/1800MHz spectrum acquired 5MHz of 2.1GHz spectrum in the 2010 auctions, then applying the weighted average approach, the service provider will pay 4 per cent on 6.2MHz and 3 per cent on 5MHZ, a weighted SUC of 3.6 per cent," it added.
Vodafone also sought that at the time of extension, the existing allocations of 900/1800MHz spectrum will be removed from the existing slab resulting in a change in the slab rate for the spectrum acquired in November 2012.
"Spectrum acquired/re-assigned at market discovered rates, will attract SUC at 5 per cent of AGR," it added.