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DoT to cut spectrum usage charge to 3% from 5% of adjusted net revenue

After evaluating impact on the exchequer, the government, in January, 2014, decided to cap SUC at 5 per cent on spectrum that were to be procured in future auction.

By: ENS Economic Bureau | New Delhi | April 5, 2016 2:40:27 am
call drops, coai, india, telecom, trai, tech news, technology SUC were earlier linked to quantum of spectrum holding of an operator in range of 3-8 per cent of their adjusted gross revenue.

The Department of Telecommunications (DoT) has decided to reduce spectrum usage charges(SUC) to 3 per cent of adjusted gross revenue made by telecom companies, against the 5 per cent levied now, a government official said.

The official said that the decision was recently cleared by the Telecom Commission, the highest decision making body of the DoT, and also the Minister of Communications and Information Technology Ravi Shankar Prasad. The proposal would now be sent to the Union Cabinet for its approval, the official said.

SUC were earlier linked to quantum of spectrum holding of an operator in range of 3-8 per cent of their adjusted gross revenue.

After evaluating impact on the exchequer, the government, in January, 2014, decided to cap SUC at 5 per cent on spectrum that were to be procured in future auction. The SUC collection was at 4.8 per cent level that time. Existing telecom operators were asked to pay the weighted average of their existing SUC (on old rate of 3-8 per cent), and 5 per cent if they acquire new spectrum.

The Telecom Regulatory Authority of India has recommended to charge SUC at uniform rate of 3 per cent across the industry. However, the recommendation faced stiff opposition from Reliance Jio —which holds pan India broadband wireless access spectrum— on which 1 per cent SUC is imposed. The government had then asked all broadband wireless access (BWA) holders, to continue paying 1 per cent on BWA.

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