Videocon Telecom, the telecommunication arm of the $4 Billion Videocon Group, favors uniform spectrum usage charge (SUC), but only for spectrum procured through auction and that too, to the extent of recovering administrative expenses in line with the terms and conditions laid down for the broadband wireless access licence.
According to the operator, in the earlier regime, spectrum was allocated administratively where no payment was made for spectrum allocation by any operator, hence there was a logic behind charging slab based SUC in accordance with the quantum of spectrum allocated. In the current regime, however, spectrum is allocated through an open market mechanism to derive the exact market value of the spectrum. Therefore it is fair that SUC charges should be levied only to the extent to cover the administrative expenses towards the management of the spectrum.
Under the current SUC policy, charges are levied according to the quantum of spectrum held by the operators, and are charged between three per cent to eight per cent basis the spectrum allocation. In short, the incumbent players who are holding large amount of spectrum will end up paying SUC at the upper end of the range.
The Telecom Regulatory Authority of India (TRAI) has recommended uniform spectrum usage charge (SUC) of three per cent to five per cent of revenue earned by mobile operators from telecom services from April 1, 2014. The uniform SUC, if implemented as per recommendations made by TRAI, will be favorable to the incumbent players.
According to Arvind Bali, director and chief executive officer, Videocon Telecom, ?In the earlier license regime, spectrum was allocated administratively, where there was no payment by the operator for spectrum allocation, hence the reason of a slab based Spectrum usage charges was logical. However, in the current regime, spectrum is allocated through auction, where the operator is paying the market value of the spectrum, thus SUC to the extent to cover the administrative expenses should be payable, which is the case of BWA license terms.?
The new policy recommendation is only beneficial to larger operators as a flat SUC rate will bring them huge monetary savings on the spectrum administratively obtained in the earlier regime.
Worldwide, telecom policies support newer operators with various advantages and the same should be followed in the Indian telecom sector as well. Any policy should promote level playing field for all therefore we recommend lower SUC for new players to ensure level playing field for all and providing greater choice to customers.
