The Union Cabinet on Wednesday approved the Telecom Commission’s recommendation that companies be charged a minimum of 3% as the annual fee for spectrum usage. The fee is to be calculated using a weighted average formula, based on the company’s adjusted gross revenue. With the Cabinet’s approval, a new spectrum auction is on the cards, which will be a boost to telecom services in the country and fetch the government a possible Rs 5.6 lakh crore.
The auction, being touted as the largest ever in India, will be held in September. For the first time, it will include 4G airwaves on the 700 Mhz band, in addition to the various other permutations of 3G and 4G. Earlier the rate charged was 5%.
The new rates mean 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%.