Vodafone seeks clarity from government over new spectrum usage charges decisions

The telecom giant says the government needs to clarify and confirm its decisions on spectrum usage charges policy.

By Kul Bhushan Published Date
31 - Jan - 2014
| Last Updated
31 - Jan - 2014
Vodafone seeks clarity from government over new spectrum usage ch...

Vodafone has sent a detailed letter to the telecom department, seeking clarity on decisions made by the Empowered Group of Ministers on spectrum usage charges.

The company has sought the new mechanism to calculate spectrum usage charge should be applicable to the 3G spectrum it acquired in 2010 auctions. Vodafone also called for bringing parity between the charges for 3G and broadband wireless access (BWA) airwaves.

“It is understood that Vodafone will pay 5% AGR on 5MHz of the freshly acquired 1800MHz and 6% on existing allocation of 10MHz, i.e. a weighted SUC of 5.7% AGR,” said the operator.

Vodafone says it had pointed that TRAI had actually recommended SUC at 1% AGR for both 2.1GHz/3G as well as BWA. Since there is virtually no distinction between the services being offered on 2.1GHz/3G and BWA – as both are classified as mobile broadband, the Government, going forward, should adopt the same SUC approach for both 2.1GHz /3G as well as BWA, i.e. for both the spectrums, the SUC be applied at 1% AGR with a weighted average for existing spectrum allocations in 900/1800MHz.

“This would also be in public interest as it will enable /facilitate faster rollout and proliferation of mobile broadband, which is one of the committed objectives of the Government under NTP-2012,” adds the operator.

Vodafone says the government needs to clarify and confirm on this.

Earlier, an Empowered Group of Minister (EGoM) on telecom has decided to slash spectrum usage charge to a maximum of 5 percent of annual gross revenue on all new airwaves put up in the auction.

The spectrum usage charge for Broadband Wireless Access (BWA) will stay at 1 percent as the government did not modify the current contractual obligations. For new airwaves, operators will have to pay a spectrum usage charge of 5 percent. The companies will have to report the revenue from BWA airwaves and new spectrum separately.