FinMin for 3% spectrum fee on mobile companies winning in auction

Tags: News
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 per cent of their revenue as annual fee for radiowaves they hold.

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

MEA suggested that "in the subsequent auction, whoever participates moves to 3 per cent 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 3-8 per cent.

The Telecom Regulatory Authority of India's (Trai) has suggested a uniform fee 3- to 5 per cent 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 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.

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.

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