The Cabinet on Wednesday approved 3 per cent flat spectrum usage charge (SUC) for the upcoming auction in September, clearing path for the Department of Telecommunications (DoT) to issue the Notice Inviting Applications marking the beginning of the auction process.
Traditionally, the auctions begin within 45-50 days of the notice being issued.
The Cabinet has also cleared the proposal on using the weighted average method to compute the charge in addition to introducing proposal for a 3 per cent floor rate for the weighted average calculation, which was approved by the inter-ministerial Telecom Commission on July 25 .
“This will facilitate to move to a simple, transparent and flat ad-valorem SUC regime in accordance with the law and avoid creative accounting to bypass the revenues,” the government said in a statement.
In one of its meetings on June 7, the Commission had cleared a proposal to use weighted average formula for calculating SUC based on the total spectrum holding, for all bands allocated to telecom operators.
For the auctions proposed to be held in September, the panel decided that SUC should be imposed at 3 per cent of a company’s adjusted gross revenue (AGR).
With its decision in July, the Commission overlooked the recommendations put forth by the Telecom Regulatory Authority of India (Trai), which, on July 12, maintained its view of having a flat SUC regime, and mooted a separate formula for computation of the charges according to the weighted average method, different than the one considered by the Commission.
The Trai had reconsidered its original proposal after the Union Cabinet, on June 22, had referenced back the SUC issue to the sectoral regulator for its opinion. However, the Commission stuck to its own stand of the weighted average calculation.