Telecommunication Companies May Pay 5 Percent Spectrum Usage Charge For New Spectrum

telecom spectrum
An Empowered Group of Ministers (EGoM) in a meeting held at New Delhi has decided that telecommunications companies that are all set to bid for spectrum in the upcoming February 3 auction will need to pay five percent of their annual gross revenue as spectrum usage charge (SUC). The SUC for broadband wireless access (BWA) spectrum will continue to remain at one percent. The decision will now go to the union cabinet for its final nod.

The SUC is levied annually as a percentage of revenue earned by telecom companies, which varies from 3-8 percent. The Telecom Regulatory Authority of India (TRAI) had earlier suggested a uniform 3-5 percent fee from April 1 across the telecom services for a successful next round of spectrum auction.

In 2012-13, the government’s revenue collection from SUC was Rs. 5,689 crores. Eight telecom service providers have applied to take part in the second generation (2G) spectrum auction due February 3. The companies are Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone, Telewings, Aircel, Tata Teleservices and Idea Cellular.

The total spectrum to be put on auction is 46MHz in 900MHz band and 403.2MHz in 1800MHz band. The government expects to mop up Rs. 40,874.50 crores from this spectrum auction.

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