DoT may not implement uniform SUC, Reliance Jio can continue with 1%

New Delhi:Locking horns with Reliance Jio Infocomm, GSM industry body COAI has said it is "illogical" that for offering same technology on different bands, operators pay different charges.

It has also said that Mukesh Ambani-led RJIL -- which has been opposing telecom regulator Trai's recommendation for a uniform annual spectrum fee -- can continue paying current charges by operating only as an Internet Service Provider.

RJIL procured Unified Licence in August 2013 by paying additional Rs 1,673 crore which allows it to provide all telecom services including mobile telephony.

 DoT may not implement uniform SUC, Reliance Jio can continue with 1%

Reuters

COAI has said in response to PTI queries on the issue: "It is illogical that for offering the same technology on different spectrum bands, operators are charged different SUC. For a customer, a mobile broadband 4G BWA technology (to be offered by RJIL) is expected to be similarly priced in a competitive market.

"How can an operator offering same technology recover an additional burden of 5-7 per cent spectrum charges."

Redoubling its efforts to counter demands of GSM players for a uniform annual spectrum fee, RJIL said yesterday that a flat fee will disturb the level-playing field for incumbent operators and new entrants.

In a letter to Telecom Minister Kapil Sibal RJIL has said the COAI demands to alter spectrum usage charge "are not only factually incorrect and misleading but are without any valid justification".

Meanwhile, the Department of Telecom is close to reaching a mid-way on the contentious issue of annual spectrum charges which might see it neither implementing the uniform level of 3 per cent as recommended by regulator Trai nor maintaining it at the current upper limit of 8 per cent.

"We have discussed it (solution) with industry players and they seem to be satisfied with it. It is very unlikely that we will lower it to 3 per cent but it is also not going to be at 8 per cent," a government source told PTI.

Spectrum Usage Charge (SUC), a bone of contention between leading GSM players and Mukesh Ambani led Reliance Jio Infocomm (RJIL), is levied annually as a percentage of revenue earned by telecom companies. It varies from 3-8 per cent.

GSM industry body Cellular Operators Association of India has demanded that the government implement Telecom Regulatory Authority of India's (Trai's) suggestion for a uniform SUC - 3to 5 per cent - from April 1, across the telecom services sector for the success of the next round of spectrum auction scheduled to start from February 3.

If Trai's recommendations are accepted by the government then it will burden firms holding broadband wireless access spectrum, including RJIL that at present pays 1 per cent SUC, it added.

On the other hand RJIL and Videocon Telecom have opposed any change in existing SUC regime, specially airwaves that have been already allocated.

RJIL has also said that recommendation of Trai will not stand scrutiny of law and will also disturb level playing field in the industry.

PTI

Updated Date: Dec 21, 2014 01:38:53 IST