GSM telcos want uniform spectrum fee in multi-band era

India’s GSM operators have reiterated their call for a uniform annual levy of 3% of annual revenue for using airwaves, mainly on grounds that segregation of revenue based on multiple spectrum bands for delivering 4G-LTE services would be a huge challenge.

“With carrier aggregation becoming a reality, the use of multiple bands such as 2300 MHz, 1800 Mhz, 800 Mhz and 700 Mhz (post-auction) for provisioning of the same LTE technology, the segregation of revenue on the basis of spectrum bands becomes almost impossible,” the Cellular Operators Association of India (COAI) wrote in a letter to Telecom Secretary J S Deepak on Tuesday.

COAI added that spectrum usage charge (SUC) – the annual fee that telcos pay the government for using the natural resource – should be gradually brought down to a flat 1%.

A uniform SUC will simplify calculations and remove all arbitrages and ambiguities, said the lobby body that represents India’s biggest telcos such as Bharti Airtel, Vodafone and Idea Cellular besides newcomer Reliance Jio Infocomm.

According to COAI, “the current SUC regime requires segregation of revenue for 2300 MHz 4G band, and is open to interpretation as well as abuse”.

In an earlier letter, dated April 7, to Deepak, COAI had welcomed the Telecom Commission’s proposal to levy an SUC of 3% for airwaves bought in the next spectrum sale, lower than the 5% in last year’s auction.

In its latest letter to Deepak, COAI said the annual fee for using airwaves in the same band for providing the same telecom service is different. “The SUC on 1800 Mhz spectrum acquired in 2014/2015 auctions are charged at 5% of adjusted gross revenue (AGR) whereas for 1800 Mhz airwaves acquired in the 2012 auction, it is charged at a slab rate,” said the GSM lobby body, highlighting the current revenue segregation challenges and contradictions.

The top mobile carriers have historically held different views on SUC. While the telcos need to pay the multiple rates as SUC, Jio, being the holder of broadband wireless (BWA) spectrum in the 2300 Mhz band, needs to pay a flat 1%.

Incumbent GSM telcos have long argued for Jio to be brought at par with them, or their SUC to be brought to Jio’s levels eventually, citing the need for a level playing field. But Jio has opposed this view, saying it will go against extant rules.

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