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Mobile auction winners should be charged 3 percent of revenue: Finance Ministry

Mobile auction winners should be charged 3 percent of revenue: Finance Ministry

By Press Trust of India | Updated: 22 January 2014 09:29 IST

Amid differences between telecom operators on spectrum usage charge, the Finance Ministry has suggested that mobile operators winning in the auction should be charged only 3 percent of their revenue as annual fee for radiowaves they hold.

For BWA players, the Department of Economic Affairs (DEA) suggested continuation of 1 percent, but charge them weighted average of 3 percent and 1 percent if they buy spectrum in upcoming auction.

DEA suggested that "in the subsequent auction, whoever participates moves to 3 percent on the entire spectrum hold", an official source said.

The spectrum usage charge (SUC), a bone of contention between leading GSM players and Mukesh Ambani-led Reliance Jio Infocomm, is levied annually as a percentage of revenue earned by telecom companies. It varies from 3 to 8 percent.

The Telecom Regulatory Authority of India's (TRAI) has suggested a uniform fee 3 to 5 percent from April 1 across the telecom services for the success of the next round of spectrum auction.

GSM industry body Cellular Operators Association of India is demanding that the government implement TRAI's suggestion.

On the other hand, Reliance Jio and Videocon Telecom are opposing any change in existing SUC regime, specially airwaves that have been already allocated.

(Also see: Reliance Jio Infocomm opposes change to spectrum usage charge for BWA)

If TRAI's recommendations are accepted, then it will burden firms holding broadband wireless access spectrum, including Reliance Jio that at present pays 1 per cent spectrum usage charge.

The spectrum auction is scheduled to start from February 3. The applicants include Reliance Jio Infocomm, Vodafone, Airtel, Aircel, Tata Teleservices, Idea Cellular, Telewings (Uninor) and Reliance Communications.

(Also see: DoT postpones spectrum auction to February 3, NIA clarifications to January 2)

The DEA has suggested some other options as well which include charge of 3 percent on spectrum won in auction. For BWA players, DEA has suggested continuation of 1 percent, but charge them weighted average of 3 percent and 1 percent if they buy spectrum in upcoming auction.

For those who don't buy any spectrum in the due auction, DEA has suggested to charge them as per existing rate slab.

The option suggested by DEA will be discussed at the Telecom Commission meeting scheduled for January 25.

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