Moneycontrol Bureau
The empowered group of ministers (EGoM) on telecom, which met today, approved a spectrum usage charge (SUC) of 5 percent of the annual gross revenue for all new spectrum acquired in the auction. Telecom minister Kapil Sibal said SUC will be computed using the weighted average of their (telcos') existing usage charge. The decision now awaits Cabinet nod.
EGoM believes this move will benefit all telecom players as it will leave surplus cash in their hands to invest in spectrum auction. However, rationalisation of SUC is likely to impact government revenue in the short-run.
Once implemented, Bharti and Vodafone's effective SUC is likely to fall to 5 percent from 8 percent. For 4G players, annual spectrum fee of 1 percent remains unchanged. The attorney-general had earlier ruled that 1 percent fee for broadband wireless access (BWA) spectrum must be continued. Companies earning from existing BWA airwaves and new spectrum will have to report revenues separately.
The Telecom Commission last week had recommended three options — first, to charge a flat fee of 3 per cent on all spectrums; second, charging a differential fee of 3-5 per cent for existing airwaves and 5 percent for new spectrum usage; third, continue with the differential pricing for existing spectrum and levy 3 percent usage charge on new airwaves.
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