Videocon opposes cutting spectrum usage charge for incumbents

Videocon Telecom, a relatively new entrant to India's mobile services market, on Monday said the existing annual spectrum charge for established or 'incumbent' cellular operators should be continued, but it should be kept at 1 per cent for spectrum that has been sold through auctions.

"Earlier, spectrum was allotted administratively, but now companies need to buy it through auctions. You can't change policy now in favour of incumbents," Videcon Telecom director and chief executive officer Arvind Bali said.

The spectrum usage charge (SUC), which is levied annually by government as a percentage of revenue earned by mobile operators, varies from 3-8 per cent. The Telecom Regulatory Authority of India has recommended levying a uniform SUC of 3-5 per cent across the sector from 1 April 2014.

Bali said government should charge only administrative fee as SUC, which should not be more than 1 per cent for the companies that have bought spectrum through auctions.

This annual fee is currently 1 per cent for firms with broadband wireless spectrum, including Reliance Jio Infocomm Ltd (RJIL) and Tikona.

While GSM players like Airtel, Vodafone, Idea Cellular and Uninor have been demanding implementation of a uniform SUC, RJIL has opposed such a move.

Bali said the communication of top executives of the four GSM companies was facilitated by the Cellular Operators Association of India, of which Videocon is also member.

"We resented and refused to sign that letter as we participated in the auction only after assessing the whole industry scenario and the policies cannot be changed now," Bali said.

The Telecom Commission, an inter-ministry body, is scheduled to meet on Tuesday to discuss SUC. The Department of Telecommunications (DoT), under the telecom ministry, is likely to place before it six different scenarios based on probable revenue impact for the exchequer, linked to changes in annual fee to be paid by companies on spectrum usage, according to a PTI report.

The views of the Telecom Commission will be sent to the empowered group of ministers on telecom, headed by finance minister P Chidambaram, which will take the final call on the issue.