Air­tel, Idea, RCom Surge on SUC Cut

The Economic Times - - Companies - Our Bureau

New Delhi: Shares of Bharti Air­tel, Idea Cel­lu­lar and Re­liance Com­mu­ni­ca­tions (RCom) rose sharply on Mon­day on news the Telecom Com­mis­sion (TC) has low­ered spec­trum us­age charge (SUC) to 3% of an­nual rev­enue for air­waves bought in the up­com­ing auc­tions, from the 5% pegged in the pre­vi­ous two sales. At close on the BSE on Mon­day, Air­tel was up 3.8% at .₹ 347.85, Idea had risen 6% to .₹ 113.30 and RCom had gained 1.9% at .₹ 51.25, out­pac­ing a pos­i­tive broader mar­ket.

On Mon­day, telecom sec­re­tary JS Deepak told ET that the TC — the highest de­ci­sion-mak­ing body in the DoT — had ap­proved an SUC of 3% for air­waves bought in the next sale, in a bid to at­tract ag­gres­sive bids in the auc­tions sched­uled in July in which the reg­u­la­tor has rec­om­mended putting over 2100 MHz of air­waves on sale across 3G and 4G tech­nolo­gies, in­clud­ing in the cost-ef­fi­cient but ex­pen­sive 700-MHz band.

SUC is the an­nual fee that tel­cos pay the gov­ern­ment for us­ing the nat­u­ral re­source.

“As for the over­all spec­trum us­age charge, that will re­main a weighted av­er­age of the new charge and the pre­vi­ous levy,” Deepak said. The TC de­ci­sion on SUC will now be sent for rat­i­fi­ca­tion by the Union Cab­i­net. Once cleared, over­all, car­ri­ers will con­tinue to pay a weighted av­er­age of the new SUC (3% for air­waves in up­com­ing auc­tions and 5% in the pre­vi­ous two auc­tions) and older fee (3-8% of an­nual rev­enue) for the over­all air­waves they hold. The SUC on BWA spec­trum in the 2300-MHz band con­tin­ues to be a flat 1%.

But Ra­jan Mathews, di­rec­tor general of GSM lobby group COAI, said that while re­duc­ing the SUC for the next auc­tions was a step in the right di­rec­tion, it was a half-baked mea­sure. “The reg­u­la­tor has said that the gov­ern­ment should charge SUV of 3% and we are hop­ing that the pro­posal will be en­tirely ac­cepted,” Mathews said.

Trai had sug­gested a flat 3% SUC for all air­waves held by oper­a­tors, but the gov­ern­ment had in Jan­uary 2014 de­cided to keep the fee for auc­tioned spec­trum at a flat 5%.

SUC was low­ered to 3% of an­nual rev­enue for air­waves bought in the up­com­ing auc­tions

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