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COAI asks DoT to implement TRAI's recommendations on spectrum usage charges

COAI asks DoT to implement TRAI's recommendations on spectrum usage charges

By Press Trust of India | Updated: 1 November 2013 13:30 IST

Reiterating its endorsement for sectoral regulator TRAI's recommendations to implement a flat spectrum usage charge (SUC) on operators, GSM industry body COAI Thursday requested Department of Telecom (DoT) to consider the regulator's proposal.

In a letter to DoT Secretary M F Farooqui, COAI said: "The recent TRAI's recommendations of flat spectrum usage charge is a step in the right direction to address the ongoing anomalies without giving any special consideration to one set of operators."

Telecom Regulatory Authority of India (TRAI) had suggested that the annual SUC be set at a flat 3 percent of companies' revenue for the spectrum they buy from auctions. Currently, companies pay anything between 3 percent and 8 percent depending on their spectrum holding.

COAI said the current policy of escalating charges discourages purchase of spectrum, 'distorts spectrum auction', skews technology choices that may result in lower revenues for the government.

"Different SUC for different spectrum bands creates anomalies and discrimination apart from creating non-level playing field," COAI Director General Rajan S Mathews said in the letter.

The GSM operators body said in the new regime where spectrum is being sold against the upfront charges through auction, an escalating SUC leads to a wide variation in the total cost of spectrum, paid over the period of the licence by the existing players in comparison to new players.

"we sincerely request DoT will correct the discrepancies in the current practise of levying SUC and consider TRAI's proposal which is aimed at ensuring a level playing field as well as long term benefits to the exchequer as also boost investor confidence," it added.

Raising issues over TRAI's suggestions on spectrum charges, Reliance Jio Infocomm had said they will make the third round of auction inconsistent and legally untenable.

The Mukesh Ambani-led firm has also alleged that TRAI recommendations favour incumbent telecom operators.

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