Reliance Jio Infocomm Limited (RJIL) has written to the government opposing GSM players demand for replacing the existing spectrum usage charge (SUC) regime with a flat SUC regime. According to RJIL, any move to change the fee structure for bandwidth already allocated or auctioned will be illegal.
The company in its communication has stated that any retrospective change in SUC rates will only result in windfall gains to existing incumbent operators and loss of revenue to the government. The company, however, has stated that it will accept any change in the fee structure for the spectrum to be allocated in the forthcoming auctions. Earlier, GSM operators had requested the government to accept the recommendations of the Telecom Regulatory Authority of India for implementing a flat SUC regime. The operators had further suggested at in case the government is not in a position to introduce flat SUC immediately, it should at least levy a uniform SUC to all technologies. For example, long term evolution (4G) technology deployment across any spectrum band should attract current SUC of 1 per cent.
Currently, the government levies SUC rates between three per cent and eight 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.
Meanwhile, for operators who won the broadband bandwidth in 2010 to offer the long-term evolution services, the fee is set at 1 per cent of the total revenue. However, GSM operators such as Bharti Airtel and Vodafone India have termed such differentiation in SUC rates as discriminatory. Wireless broadband players like RJIL and Tikona Networks would have to pay a higher share of their revenue to the government if the flat SUC regime is adopted.
In its letter, RJIL has stated that any increase in SUC rates from one per cent to 3 per cent will be a violation and breach of the contract signed between the company and the government before the 2010 spectrum auctions, and hence cannot stand legal scrutiny. The company has also termed GSM operators? claim that operators will face huge losses if the current SUC regime continues, as false and misleading. According to RJIL, reduction in SUC rates would provide large and undue advantage only to the incumbent operators who are currently holding the largest share of spectrum allocation, whereas for the new players do not stand to gain any benefit from reduction in SUC rates.
