Telecom Commission recommends 3 spectrum fee options to EGoM

The Telecom Commission today recommended three options for levying annual spectrum charges on telecom operators, which will be considered by the Empowered Group of Ministers at their meeting on Monday.

"We have suggested three options to the EGoM, which will take a final call," Telecom Secretary M F Farooqui told reporters after a meeting of the inter-ministerial panel.

The matter is crucial for the spectrum auction scheduled to start on February 3, from which the government expects to raise at least Rs 11,300 crore to curb the fiscal deficit.

The EGoM will also consider the Telecom Regulatory Authority of India's recommendation for a uniform spectrum usage charge (SUC) of 3 to 5 per cent from April 1 across the sector.

Sources said the Commission suggested levying an SUC equivalent to the weighted average of 3 per cent for spectrum won in the upcoming auction and the existing slab rate.

The second option is the weighted average of 5 per cent for the airwaves to be auctioned and the current slab rate.

The third recommendation is to continue with the existing regime, the sources said.GSM operators such as Bharti Airtel, Vodafone and Idea Cellular have locked horns with Mukesh Ambani-led Reliance Jio Infocomm following the TRAI's recommendation of a uniform SUC.

The charge is levied annually by the government as a percentage of revenue earned from telecom services.

It currently ranges from 3 to 8 per cent for mobile operators, while for firms with broadband wireless spectrum such as Reliance Jio Infocomm Ltd and Tikona, the fee is 1 per cent.

Sources said the panel is learnt to have worked out three options for the SUC on BWA spectrum. One of the options is levying the weighted average of 1 per cent on BWA and 3 per cent when combined with other sets of airwaves.

However, the Attorney General is understood to have advised against revising the BWA spectrum levy and has suggested that the government continue with the current rate of 1 per cent and not club revenue generated from any other set of airwaves.

Eight telecom service providers, including 7 GSM operators, have applied to participate in the spectrum auction scheduled to start on February 3. There were no bidders in the March auctions and only five in the November 2012 auctions, indicating huge interest in the forthcoming offer of airwaves.

The applicants include Reliance Jio Infocomm, Vodafone, Airtel, Aircel, Tata Teleservices, Idea Cellular, Telewings (Uninor) and Reliance Communications.

Sources said the Monday deadline for withdrawal of applications would not be extended.