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Updated: January 15, 2014 15:38 IST

Government plans to finalise spectrum charges before auction

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A file picture of Secretary, Telecommunications M.F. Farooqui. Photo: Ramesh Sharma.
Business Line
A file picture of Secretary, Telecommunications M.F. Farooqui. Photo: Ramesh Sharma.

The government expects to finalise the issue of annual spectrum charges, over which telecom operators have locked horns, before the auction of airwaves scheduled to start on February 3.

“...all will be resolved before auction,” Telecom Secretary M F Farooqui told reporters on the sidelines of the Telecom Sector Skill Council event.

He was responding to media queries on unresolved issues such as spectrum usage charges (SUC) and guidelines on mergers and acquisitions, on which industry has sought clarity before bidding for airwaves.

“Everyone is waiting for clarity on SUC. We can take a call only when clarity is there,” Bharti Group Deputy Managing Director Akhil Gupta said when asked about the stand of his company on auctions. Bharti Airtel is the largest mobile phone operator in the country.

Wednesday is last date for submitting applications to take part in the spectrum auction and withdrawals are allowed until January 27.

The SUC, which has become a bone of contention between GSM players and the Mukesh Ambani-led Reliance Jio Infocomm (RJIL), is levied annually as a percentage of revenue earned by telecom companies and varies from 3 to 8 per cent.

GSM industry body Cellular Operators Association of India has demanded that the government implement the Telecom Regulatory Authority of India’s suggestion for a uniform SUC of 3 to 5 per cent from April 1 for all telecom services.

If the recommendation is accepted, it would increase the burden on companies that hold broadband wireless access spectrum, including RJIL, which are required to pay SUC at the rate of 1 per cent.

RJIL and Videocon Telecom oppose any change in the existing SUC regime, especially for airwaves that have already been allocated. RJIL also said the recommendation by the regulator will not stand the scrutiny of law and will disturb the level playing field in the industry.

Meanwhile, government sources indicated it is unlikely that a uniform SUC level of 3 per cent will be implemented and neither would the current upper limit of 8 per cent be maintained.

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