Telcos seek further cut in spectrum usage charges to 1%

Though the government has decided to reduce spectrum usage charges (SUC) to 3 per cent of adjusted gross revenue from 5 per cent for telecom companies, industry stakeholders today urged the Department of Telecommunications to further reduce it to 1 per cent.

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

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 per cent of aggregated gross revenue (AGR( will bring in much needed relief to the highly capital intensive telecom sector.

"The telecom sector is severely debt laden (more than Rs3 lakh crore and growing). This reduction in SUC charges from 5 to 3 per cent will free cash flows which can be invested towards further enhancing network and customer experience," said Sunil Sood, managing director and chief executive,  Vodafone India.

"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 COAI, which represents operators on the GSM platform, also urged for a uniform SUC regime as it said the multiplicity of SUC rates leads to ambiguities while entering into merger and acquisition deals and spectrum trading and sharing transactions.

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