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TMCNet:  ' Spectrum fees cut to cost ` 3,738 cr' [Mail Today (India)]

[December 30, 2013]

' Spectrum fees cut to cost ` 3,738 cr' [Mail Today (India)]

(Mail Today (India) Via Acquire Media NewsEdge) THE Department of Telecommunications ( DoT) has estimated that lowering annual spectrum fees as recommended by Telecom Regulatory Authority of India ( Trai) will cause the national exchequer a loss of ` 3,738 crore on renewal of three licences of telecom companies that will expire in 2014. Bharti Airtel's licences in Delhi and Kolkata, Vodafone India's in Delhi, Mumbai and Kolkata, and Loop Mobile's licence for Mumbai will expire in 2014.

" By charging Trai- recommended reserve price and flat rate of SUC ( spectrum usage charge) of three per cent on annual gross revenue ( AGR) from the existing rate of six per cent will result in loss in net present value term at 12.5 per cent. This would result in loss of ` 3,738 crore," a DoT official said.

While estimating the loss, DoT has assumed that licences of the three operators would get spectrum at Trai- recommended price and the same quantum that they hold now.

Trai had recommended implementing a uniform SUC of three per cent from April 1, 2014, and keeping the upper limit of SUC slab at five per cent.

SUC, which is levied annually by the government as a percentage of revenue earned by mobile operators, varies from three to eight per cent.

While the recommendation may end up providing some relief to players like Airtel, Vodafone, Idea Cellular, Reliance Communications, it may burden holders of broadband wireless access ( BWA) spectrum like Reliance Jio Infocomm who are required to pay a mere one per cent SUC. On Thursday, top executives of Airtel, Vodafone, Idea and Uninor approached the Prime Minister's Office, the empowered group of ministers on telecom, DoT and Trai seeking implementation of a uniform rate across the industry.

(c) 2013 India Today Group. All Rights Reserved. Provided by, an company

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