Indian telecom associations oppose license fee on traded spectrum

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Indian telecom associations oppose license fee on traded spectrum

August 10, 2015

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Indian telecom associations Cellular Operators Association of India (COAI) and Association of Unified Telecom Service Providers of India (AUSPI) have expressed opposition over the government’s proposal to levy a charge of 13 per cent on revenues earned from trading spectrum.

At present, when the spectrum is purchased in an auction, the government receives the market-determined price for it. Subsequently, based on the usage of the spectrum and the revenue generated from it, the government receives the license fee and spectrum usage charges (SUC) as per the prescribed rates over the period of assignment of spectrum.

However, license fee and SUC are now being proposed to be imposed on the transaction itself in case the spectrum is being traded. Operators believe that such a move may lead to double payment as the SUC and license fee in any case will have to be paid by the recipient operator later. The industry bodies have proposed that the amount received from spectrum trading be excluded from annual gross revenue (AGR) for calculating/levying licence fee and SUC.