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This is an archive article published on November 20, 2013

Vodafone urges EGoM to consider SUC charge at 3%

Telecom firm also says the reserve price of 1,800 MHz spectrum is high.

Vodafone India has urged a high-level ministerial panel,which is to meet on Friday,to approve a uniform Spectrum Usage Charge (SUC) pegged at 3 per cent of adjusted gross revenues of telecom service providers. Currently,SUC ranges from 1 to 6 per cent,depending on the amount and type of spectrum held by the service provider.

The Vodafone plea to the the Empowered Group of Ministers (EGoM) comes at a time when the government is planning to bring about clarity on issues such as SUC,M&A norms and spectrum-sharing,ahead of the proposed auction of the airwaves in January 2014.

While the Trai has also recommended a uniform SUC for telecom operators,some thing that companies offering services under the CDMA technology platform such as Reliance Jio and Tata Tele have argued against,as they pay SUC at 1 per cent rate currently.

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“The current SUC regime acts as a disincentive for any merger or acquisition,spectrum sharing and trading as well as in acquiring any additional spectrum. It also creates unwanted opportunities for arbitrage between bands and technologies likely to operate under a common unified licence,etc,” Vodafone said in a release. It added that if the government fails to do so,all spectrum policy reforms being considered by the government will simply not succeed.

Vodafone has also said that the reserve price of 1800 MHz spectrum was still on the higher side. “Further increase in the reserve price of spectrum by the Telecom Commission will adversely affect participation in the forthcoming auctions,and could again result in an unsold spectrum scenario,as was the case in November 2012 and March 2013,” said the company.

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