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Videocon Telecom against lowering of spectrum usage charge

Videocon Telecom against lowering of spectrum usage charge

By Press Trust of India | Updated: 6 January 2014 17:11 IST

Telecom operator Videocon Telecom said on Monday that it favoured the continuation of the existing annual spectrum charge for incumbent operators, but suggested that it be kept at 1 percent for the radio-waves that have been sold through auction.

"Earlier, spectrum was allotted administratively, but now companies need to buy it through auctions. You can't change policy now in favour of incumbents," Videocon Telecom Director and Chief Executive Officer Arvind Bali told PTI.

The spectrum usage charge (SUC), which is levied annually by government as a percentage of revenue earned by mobile operators, varies from 3-8 percent.

The Telecom Regulatory Authority of India (TRAI) has recommended levying of uniform SUC 3-5 percent from April 1, 2014 across the sector.

Bali said government should charge only administrative fee as SUC, which should not be more than 1 percent for the companies that have bought spectrum through auctions.

This annual fee is currently 1 percent for firms with broadband wireless spectrum, including Reliance Jio Infocomm Ltd (RJIL) and Tikona.

While GSM players like Airtel, Vodafone, Idea Cellular and Uninor have been demanding implementation of uniform SUC, RJIL has opposed any such move.

Bali said the communication of top executives of the four GSM companies was facilitated by the Cellular Operators Association of India (COAI), of which Videocon is also member.

"We resented and refused to sign that letter as we participated in the auction only after assessing the whole industry scenario and the policies cannot be changed now," Bali said.

Inter-ministerial panel Telecom Commission is scheduled to meet on Tuesday to discuss SUC.

The DoT is likely to place before inter-ministerial panel Telecom Commission six different scenarios based on probable revenue impact for the exchequer, linked to changes in annual fee to be paid by companies on spectrum usage.

The views of TC will be sent to the Empowered Group of Ministers (EGoM) on telecom, headed by finance minister P Chidambaram, which will take a call on it.

The EGoM could also determine whether their decision will need final approval from Cabinet.

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