Cabinet green lights new spectrum usage price floor

4 Aug 2016

The cabinet has approved the Telecom Commission’s decision on the spectrum usage charge (SUC), the Economic Times reports. The decision set a floor of 3.00% of annual gross revenues for the SUC, which will otherwise still be based on a weighted average. Further, the decision set a flat SUC of 3.00% for all spectrum bands in the upcoming tender, down from the 5.00% levy on frequencies purchased in the 2015 sale.

As previously reported by CommsUpdate, many operators – notably incumbents such as Bharti Airtel, Vodafone India and Idea Cellular – had requested the introduction of a flat SUC for all operators and across all bands, but the Telecom Commission was forced to reject the request on the basis that it could not increase the charge for broadband wireless access (BWA) spectrum in the 2300MHz band above its current 1%. With the introduction of the new SUC, Reliance Jio Infocomm and Aircel will both have to pay a slightly higher SUC. Aircel’s charge will increase from 2.83% to the minimum of 3.00% whilst RJIL’s fee will increase to 3.05% from 2.88% under the previous regime. The 0.05% over the minimum is due to RJIL’s spectrum sharing agreement with Reliance Communications (RCOM). By contrast, Airtel, Vodafone and Idea will pay 3.80%, 4.80% and 4.50% respectively.