The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has requested the government to adopt a uniform spectrum usage charge (SUC) regime before the spectrum auction begins in January 2014. According to the industry body operators will be discouraged to bid for spectrum if the government continues to levy SUC at the current rates. ASSOCHAM has claimed that the last two auctions held in November 2012 and March 2013 failed to attract encouraging response from the industry on account of high reserve price and escalated SUC regime.
Currently, the government levies SUC between 3 per cent and 8 per cent of revenue earned by the operators, depending on the quantum of spectrum held by them. Earlier, the Telecom Regulatory Authority of India had suggested that the operators should be asked to pay a flat SUC of three per cent of their total revenues if the players have obtained spectrum by participating in a spectrum auction. However, those operators who have received spectrum by paying price set by the government should be charged a flat SUC of five per cent.
The industry body has further stated that none of the spectrum reforms being introduced by the government like spectrum sharing, spectrum trading, revised merger and acquisition guidelines will take off until there is a uniform SUC regime. Additionally, ASSOCHAM has claimed that the Department of Telecommunications? concern that the implementation of uniform SUC may lead to a loss of Rs 25 billion to the government is unfounded. It has suggested that as an alternative the government could set uniform SUC at a rate that will lead to revenue neutrality.
