Telecom Commission recommends minimum spectrum usage charge at 3%
The proposal will be sent to the Cabinet next week for sanction. If approved, Reliance Jio Infocomm and Aircel Ltd will have to pay more than they currently do.
The Telecom Commission on Monday upheld its previous recommendation of using a weighted-average formula to calculate the annual fee that companies need to pay for spectrum usage. Besides, as part of its efforts to introduce an uniform rate for all firms, the commission also decided to fix the minimum spectrum usage charge at 3% of a company’s adjusted gross revenue.
For the upcoming spectrum auctions, a flat rate of 3% will be charged, while for the remaining airwaves the weighted-average method will apply. The existing spectrum sharing guidelines also asks companies that share the spectrum to pay an additional 0.5% SUC, reported the Economic Times.
The proposal will be sent to the Cabinet next week for sanction. According to Business Standard, the annual revenue from SUC will go up if the Cabinet ratifies the proposal. Currently, the total annual SUC collection is Rs 7,500 crore. Prashant Singhal, global telecommunications leader at Ernst & Young, told LiveMint, “The Cabinet shall issue a notice inviting applications after it ratifies the proposal and finalises SUC rate. After that it will take 45-50 days to begin the spectrum auction.”
Reliance Jio Infocomm and Aircel Ltd will be affected the most. Earlier, Reliance used to pay 2.88% of its adjusted gross revenue as SUC and Aircel paid 2.83% of the same. Now, the Reliance will have to pay 3.05% and the Aircel will pay 3%. Other firms such as Bharti Airtel Ltd, which paid an SUC of 4.9%, will have to pay 3.8% while Vodafone India will cough up 4.8% and Idea Cellular Ltd will shell out 4.5%.