The Empowered Group of Ministers (EGoM) today approved a spectrum usage charge (SUC) of 5 percent of the annual gross revenue on all the new airwaves acquired in auction. Also Read - Vi prepaid recharge plans July 2021: List of all Vi recharge plans under Rs 500 with benefits, validity
Existing telecom operators will have to pay the weighted average of their existing SUC, and 5 percent if they acquire new spectrum.
“For all new spectrum, which will be sold, it will be 5 percent but it will be charged at weighted average.
There is no protection of revenue. In this process if government losses some revenue, doesn’t matter. Ultimately consumers have to be benefited,” Telecom Minister Kapil Sibal told reporters here.
He added the decision will go to Cabinet for final approval.
The SUC for broadband wireless access (BWA) spectrum will continue to remain at 1 percent as the government has not amended the existing contractual obligation.
However, they will have to pay a SUC of 5 percent for the new airwaves they acquire. These companies have to report separately the revenue earned from BWA airwaves and new spectrum.
“Ultimately it is consumers who need to benefit. Big players (charges) will come down. It will not affect new players,” Sibal said.
Government, at present, gets pan India average SUC of 4.8 percent on airwaves allocated till date which has now been fixed at 5 percent. Hence, there will be no adverse impact on existing revenue, official sources said.
The Telecom Commission has recommended three options to the EGoM headed by Finance Minister P Chidambaram – a levy of 3 percent with weighted average, 5 percent with weighted average and continuation of the existing regime.
GSM firms such as Bharti Airtel, Vodafone and Idea Cellular have locked horns with Mukesh Ambani-led Reliance Jio Infocomm following the Trai’s recommendation of a uniform SUC.
The charge is levied annually by the government as a percentage of revenue earned from telecom services.
It currently ranges from 3 to 8 percent for mobile operators, while for firms with Broadband Wireless Access (BWA) spectrum such as those of Reliance Jio Infocomm Ltd and Tikona, the fee is 1 percent.
“Rationalisation of issue, Nobody should be a loser,” Sibal said, adding,”More investment is sector means more service and lower tariffs for consumers.”
Major telecom operators including Airtel and Vodafone had written to the Department of Telecom to take a call on SUC before auction starts on February 3.