Telecom panel fixes minimum 3% spectrum usage charge


The Telecom Commission on Monday stuck to its position in favour of using a weighted average formula to calculate the annual fee that telecom companies pay for using airwaves.However, it has decided to fix a minimum rate of three per cent of a company’s adjusted gross revenue as spectrum usage charge (SUC), in a bid to move towards a uniform rate for all players.
Cabinet approval
The Cabinet approval on the decision will be sought next week, a senior telecom ministry official said post the meeting.The Telecom Commission had earlier approved the use of the weighted average formula for calculating the SUC based on total spectrum holding of the operator. To protect government revenues, of about Rs.7,500 crore from SUC, it was also decided the operators will have to pay as SUC a minimum floor price, which would be the latest charges paid by the company.
It was also decided that for the auctions to be held later this year, the SUC will be imposed at three per cent.
With the weighted average, the usage charges in percentage terms would come down for spectrum in the 2300 MHz band, bought in the 2010 auctions. Airtel’s SUC will fall from 4.9 per cent to 3.8 per cent. Reliance Jio will pay about 3 per cent instead of about 5 per cent.
The Union Cabinet had last month decided to refer back the issue of SUC to TRAI for its recommendations.
The regulator had said that the weighted average formula, as suggested by the telecom department, for calculating the annual charge that operators pay to use airwaves “is at best a temporary solution”, and had proposed its own formula to calculate the SUC. TRAI has been pitching for a flat SUC.
However, the telecom department was unable to make any changes towards a flat SUC after objections from the Auditor-General.

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