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Telecom Commission to take SUC call next week

The Telecom Commission, the highest decision-making body in the Department of Telecommunications, will meet on Monday to decide the issue of spectrum usage charge, a key requirement for conducting the upcoming auction of airwaves.

The commission, which has representatives from the ministries of finance and commerce and the Department of IT, will decide whether to accept the telecom regulator’s suggestion of introducing a “normalization factor” to the telecom department’s current practice of calculating SUC. “The commission is meeting on Monday and hopefully the matter will be put up for cabinet approval immediately after,” a telecom department official said.

However, as reported earlier by ET, the DoT has found fault with the Telecom Regulatory Authority of India’s formula and will most likely suggest other ways of calculating SUC. Industry experts said the department could propose a flat SUC for all spectrum or reiterate its own weighted average formula, which it had presented to the Cabinet. The third option is to continue charging separately for broadband wireless access (4G) and other airwaves, which is the current practice. “The department could make some minor changes to the formula previously suggested by it,” people familiar with the matter told ET.

The final decision on SUC will be taken by the cabinet, which had sought recommendations from the telecom regulator. The telecom department is working to fix the SUC so the next round of spectrum auctions can be held by September as planned, people said. Trai’s proposed formula was found to be very complex and, according to DoT officials, would lead to duplication of bid values.

The Telecom Commission had first sought the attorney-general’s view on whether a flat SUC of 4.5% of annual revenue could be charged for all airwaves, including the 4G BWA sold in 2010. The AG had said the BWA auction rules don’t permit SUC to be increased for the airwaves sold in 2010. This bandwidth, 2300 MHz, continues to attract a flat SUC of 1%, while the government calculates the charge for all other airwaves for telcos as aweighted average.

However, given the difficulty in assessing revenue arising from different bandwidths, the government has been trying to narrow the difference between rates charged for various bands.

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