New spectrum usage charge fixed at 5 pc

Mobile telephone service providers keen to buy spectrum or airwaves in the February 3 auction will have to pay 5 per cent of their annual gross revenue as spectrum usage charge (SUC).

The Empowered Group of Ministers' (EGoM) panel, headed by Finance Minister P Chidambaram, here on Monday also decided that existing telecom operators would have to pay the weighted average of their existing SUC, and 5 per cent if they acquire new spectrum. However the final decision will be taken by the Union Cabinet.

“For all new spectrum which will be sold, it (SUC) will be 5 per cent, but it will be charged at weighted average. There is no protection of revenue. In this process, if the government losses some revenue, it doesn't matter. Ultimately, consumers have to be benefited,” Telecom Minister Kapil Sibal told reporters here after the meeting.

The SUC for broadband wireless access (BWA) spectrum will remain at 1 per cent. But its operators have to pay an SUC of 5 per cent for new airwaves they acquire. These companies have to report separately the revenue earned from BWA airwaves and new spectrum.

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