Vodafone seeks level playing field with Jio

Tags: News
Vodafone has taken on Reliance Jio Infocomm and Tikona by demanding a level playing field with regard to the 1 per cent spectrum usage charge (SUC) that the Mukesh Ambani firm is to pay for mobile broadband services.

Vodafone has asked the government to apply the 1 per cent SUC to all mobile broadband services offered either on broadband wireless access (BWA), 2.1 ghz or 3G spectrum acquired in 2010.

“…There is virtually no distinction between the services being offered on 2.1 ghz / 3G and BWA as both are classified as mobile broadband,” Vodafone said in a letter to telecom secretary MF Farooqui on Thursday.

The regulator, Trai, had favoured a uniform 3-5 per cent SUC on aggregate gross revenue of telecom firms from both airwaves. But a ministerial group did not accept the recommendation.

Vodafone is reconciled to paying 5 per cent SUC on fresh airwaves in the 900 mhz and 1800 mhz bands on a ‘weighted average’ basis. These airwaves will be auctioned on February 3.

Vodafone India managing director Marten Pieters said that making SUC 1 per cent for both BWA and 2.1 ghz would “facilitate faster rollout and proliferation of mobile broadband.”

The ministerial group decided to continue with 1 per cent SUC for Reliance Jio Infocomm and Tikona. Other companies like Bharti, Vodafone and Idea Cellular that got spectrum earlier at administered rates have to pay existing usage charges.

Pieters has asked the government to notify the SUC charge at 5 per cent on all new spectrum in 900 mhz and 1800 mhz bands before the auctions begin.

It has also asked the government to confirm that on renewal, the 1800 mhz spectrum acquired in November 2012 will attract the new 5 per cent SUC.

Voicing concerns at the ministerial group’s decision, Vodafone has sought clarification on the principle of ‘weighted average’ computation of SUC that has been cleared. The company has also asked the government clarify afresh the SUC applicable to 2.1 ghz spectrum in future auctions.

Meanwhile, all eight top telecom firms have decided to stay put in the spectrum auctions. Wednesday, the last day for withdrawal, went without anyone opting out. The payment has been set at 28 per cent and 33 per cent, respectively, of the bid amount for the two bands. The balance is payable later.

FM P Chidambaram expects to rake in Rs 48,685 crore from spectrum sale this financial year.

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