A day before the Telecom Commission’s scheduled meeting on ‘spectrum usage charges’ (SUC), Mukesh Ambani-promoted Reliance Jio Infocomm Ltd (RJIL) has written to the Telecom Secretary, opposing any change in the SUC regime for radio waves already allotted to companies. The demand comes amid representations from various forums, including the Cellular Operator Association of India (COAI), seeking uniform SUC, which has also been recommended by the Telecom Regulatory Authority of India (TRAI).
“Unilateral increase in SUC for BWA spectrum from 1 per cent to 3 per cent will be illegal...The government may take appropriate decision on SUC for forthcoming auctions but without altering the present SUC regime, either directly or indirectly, for already allocated/auctioned spectrum. Any retrospective change in the SUC regime for already allocated/auctioned spectrum will be illegal, in breach of solemn contract commitments and without any authority of law,” RJIL said in the letter to the Telecom Secretary. The letter has also been forwarded to Telecom Minister Kapil Sibal.
Notably, old mobile operators such as Bharti Airtel, Vodafone and Idea have welcomed TRAI’s recommendation. If accepted, it would put burden on broadband wireless access (BWA) spectrum holders such as RJIL as their SUC will go up from one per cent to 3 per cent. At present, GSM players are paying 3-8 per cent SUC of their annual revenues.
Stating that any change in the SUG regime would lead to revenue loss to the government, RJIL further said: “Such move will only result in windfall gains to existing incumbent operators and thousands of crores of loss to the government, and is without any justifiable reason. We also urge DoT that any decision of SUC regime for forthcoming auctions should have no bearing on the prevalent SUC regime for the existing spectrum allocation and should not restrict competition by limiting auction participation.”
RJIL also noted that the terms and conditions of ‘Notice Inviting Application’, main document of spectrum auctions, are equally binding on DoT and bidders, and any post facto deviation in auction rules, which extends undue benefit to incumbent operators, will not stand judicial scrutiny. Significantly, DoT, on Monday, announced details of the forthcoming spectrum auction schedule that begins on January 2 and the auction commences on February 3.
