COAI Urges Slashing of Spectrum Usage Charges

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By Indo-Asian News Service | Updated: 19 April 2016 16:11 IST
Though the government has decided to reduce spectrum usage charges (SUC) to 3 percent of adjusted gross revenue from 5 percent made by telecom companies, the industry stakeholders on Tuesday urged the Department of Telecommunications to further reduce it to 1 percent.

"We request that to start with SUC at a uniform rate of 3 percent be made applicable for all spectrum, which may be further reduced to 1 percent in a phased manner," the Cellular Operators' Association of India (COAI) said in a letter to Telecom Secretary J.S. Deepak on Tuesday. A copy of the letter is available with IANS.

The letter was written by COAI director general Rajan S. Mathews.

In a separate statement, Vodafone India said the government's plan to reduce SUC from 5 to 3 percent of AGR will bring in much needed relief to the highly capital intensive telecom sector.

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"The telecom sector is severely debt laden (more than Rs. 3 lakh crores at last count and growing). This reduction in SUC charges from 5 to 3 percent will free cash-flows which can be invested towards further enhancing network and customer experience," said Sunil Sood, managing director and CEO, Vodafone India.

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"It is a positive step that benefits the industry and is also in line with the Trai's (Telecom Regulatory Authority of India) recommendation of having a uniform, minimal SUC charge for all spectrum across the industry," he added.

The industry body - COAI - also urged for uniform SUC regime as it said the multiplicity of SUC rates leads to ambiguities while entering into merger and acquisitions and spectrum trading and sharing transactions.

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"A uniform SUC will simplify the calculations and remove all arbitrages and ambiguities," the letter stated.

 

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Further reading: DoT, India, Spectrum, Telecom, Trai, Vodafone, COAI
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