Telecom Min to approach Cabinet for reducing spectrum charges

Telecom Ministry is expected to approach the Cabinet for its nod to reduce spectrum usage charges from existing 5% to 3% of the revenue earned by companies from telecom services.

"The Telecom Commission has agreed to charge SUC (spectrum usage charges) at 3% level 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," an official source told PTI.

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

After evaluating impact on the exchequer, the government, in January, 2014, decided to cap SUC at 5% on spectrum that were to be procured in future auction. The SUC collection was at 4.8% level that time.

Existing telecom operators were asked to pay the weighted average of their existing SUC (on old rate of 3-8%), and 5% if they acquire new spectrum.

The Telecom Regulatory Authority of India has recommended to charge SUC at uniform rate of 3% across the industry.

However, the recommendation faced stiff opposition from Reliance Jio — which holds pan India broadband wireless access spectrum, on which 1% SUC is imposed.

The government had then asked all broadband wireless access (BWA) holders, including Aircel and Airtel, to continue paying 1% on BWA but they were asked to pay 5% of adjusted gross revenue on all spectrum they will purchase in the future.