Videocon Telecom suggests uniform spectrum usage charges

6th January 2014 | By Mouseworld Now Correspondent |

Videocon-logoNew Delhi, India, January 6, 2014: Videocon Telecom, the telecommunication arm of the $4 Billion Videocon Group, favors uniform SUC, but only on spectrum procured through auction and that too, to the extent of recovering administrative expenses similar to the current BWA license terms.

The telco is of the opinion that in the earlier regime, spectrum was allocated administratively where there was no payment made for spectrum allocation by any operator, hence there was a logic behind charging slab based SUC in accordance to amount 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 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 amount of airwaves held by the operators, and are charged between 3% to 8% basis the spectrum allocation. In short, the Incumbents who are holding large amount of spectrum will end up paying SUC at the upper end of the range.

TRAI on this has recommended uniform spectrum usage charge (SUC) of 3% to 5% 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 incumbents.

The views of telco has come in just before the TRAI’s recommendations are to examined by the Telecom Commission on levying of an uniform annual fee on spectrum usage.

Director and CEO of Videocon Telecom Arvind Bali said, “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 bigger 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 I feel that the same should be followed in the Indian telecom sector as well. Any policy should promote level playing field for all, and we recommend lower SUC for new players to ensure level playing field for all and hence greater choice to customers.

I am hopeful that the Telecom Commission will consider our plea and shall take decision in the best interest of all.”


© Mouseworld Now News Service

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