Telecom stocks today gained up to 3.4 per cent after the Telecom Commission backed lowering of spectrum usage charge to 3 per cent of their annual revenue from next auction. But to prevent revenue loss to the government, if new SUC computation leads to a lower payout, operators will have to shell out at least what they did in 2015-16.
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“For future auction, the Telecom Commission stood by its recommendation to levy 3 per cent SUC”, an official source told PTI. “All the spectrum bands will be auctioned simultaneously”, sources said.
Shares of Bharti Airtel, Idea Cellular and Reliance Communications (RCom) gained on Wednesday after reports said that the Telecom Commission has made a decision to levy a lower spectrum usage charge of 3 per cent on future spectrum auction. Accordingly, Bharti’s SUC which stands at 4.9 per cent will come down to 3.74 per cent, Reliance Jio will pay 2.88 per cent instead of 5 per cent; while Aircel’s SUC will also reduce from 3.24 per cent to 2.83 per cent.
A technical panel of the Department of Telecom has said it is hard to segregate revenue of companies holding airwaves in multiple bands. Once cleared, carriers will pay a weighted average of new SUC (3 per cent for airwaves bought in the upcoming auctions), 5 per cent for spectrum purchased in the previous two auctions and an older fee of 3-8 per cent for administratively held spectrum.
In 2008, a similar issue had cropped up before the department of telecom while deciding SUC for 3G spectrum when an internal panel had ruled that the segregation of revenues between 2G and 3G services was not possible because of similar inter-working of phones and SIM cards across the two technologies.
GSM industry body COAI had earlier sought uniformity in the rate of SUC at 3 percent for all assigned airwaves and bringing it further down to 1 percent in a phased manner.
For BWA spectrum holders like Reliance Jio, Airtel and Aircel, the same method was put in place, considering 1 percent SUC on airwaves held by them in 2300 Mhz band.
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The official sources said the telecom panel on Tuesday suggested the SUC will be calculated on weighted-average methodology.
