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Airtel suggests new formula to calculate SUC

Weighted average method should be extended to 3G spectrum and all spectrum in 900, 1800 and 2100 MHz band should be collectively taken when calculating SUC.

New Delhi |
Updated: February 1, 2014 8:18:54 pm

The weighted average method to calculate spectrum usage charges, as accepted by the Union Cabinet, has not found favour with all telcos. Bharti Airtel on Friday proposed that the weighted average formula should include 3G spectrum; this could bring down the usage fee for the company on the highest slab of spectrum in Delhi to 5 per cent from 5.6 per cent.

On Thursday, Vodafone India had urged the government to move to 1 per cent flat spectrum usage charge for 4G (broadband) as well as 3G spectrum since high-speed data services offered on both these frequency bands are classified as mobile broadband.
Currently, standalone 3G spectrum attracts a 3 per cent usage fee while SUC on 4G airwaves is at 1 per cent of adjusted gross revenue. Spectrum usage charge (SUC) is a percentage of an operator’s adjusted gross revenue payable to the Centre annually.
Bharti currently pays 6 per cent on 10 MHz of spectrum it holds in Delhi. As per the Department of Telecom’s (DoT) weighted average formula, which includes spectrum bought in November 2012 auction, spectrum bought in forthcoming auction and administratively allocated radiowaves, SUC would be 5.6 per cent in Delhi. However, if Bharti’s proposal is accepted, which includes 3G spectrum bought in 2010, the SUC for Delhi is likely to fall to 5 per cent.

As per Bharti, “The decision taken by the Cabinet confirms that SUC is to be calculated based on weighted-average of the standalone SUC applicable for different types of spectrum (administrative and auctioned) and the issue of revenue segregation between 2G and 3G spectrum is no longer valid.”

Therefore, the firm said, the weighted average method should be extended to 3G spectrum and all spectrum in 900, 1800 and 2100 MHz band should be collectively taken when calculating SUC.

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