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14-Jul2016

Government should move to a flat 1 per cent levy for SUC as suggested by Trai : COAI

Voicing agreement with Telecom Regulatory Authority of India (Trai) decision on spectrum usage charge (SUC), a grouping of GSM telcos, Cellular Operators Association of India (COAI) has said that the government should move to a flat 1 per cent levy for SUC as suggested by Trai or clearly specify a timeline in case it decides to adopt an interim weighted average formula recommended by Trai recently as temporary option.

The group said that Cabinet and the Telecom Commission are not so constrained and should move to what Trai sees as the appropriate SUC regime, which is a flat SUC rate, and not a weighted average approach. However, COAI said that if the Cabinet decides to adopt an interim weighted average method, it should clearly specify in the NIA (Notice Inviting Applications) when it intends to move to a flat spectrum usage rate, as recommended by the telecom watchdog

Trai though had reiterated its stand of a flat SUC, terming it the best option; it had recently proposed a new weighted average formula to calculate SUC for telecom operators to replace the existing formula used by DoT. It added that a weighted average formula to calculate SUC is a best temporary solution. The new formula takes into account the 'bid values' of each bandwidth to the existing weights as the sole quantity of airwaves is not a sufficient weight and revenue arising out of each bandwidth should also be taken into account. However, since revenue segregation cannot be done, the bid amount paid by an operator was indicative of the revenue expected from that bandwidth. Trai has made its suggestions to the DoT which will forward it to the cabinet for a final approval.

Spectrum auction was earlier planned by DoT in July, in which airwaves worth Rs 5.66 lakh crore will be put on the block, but with the Cabinet asking for Trai's view on SUC; it deferred the sale, till September. The government plans to raise around Rs 5.76 trillion if the entire spectrum gets sold at the reserve price.


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