Vodafone has sought clarity from government on SUC decisions key highlights. In a letter to the MF Farooqui, Secretary, Department of Telecom, India’s second largest telecom operator in terms of subscribers has sought formal notification of the revised SUC in advance of the auctions which are scheduled to commence on 3 February 2014.
 
It sought confirmation that in case of additional spectrum acquired in the forthcoming auction, ‘the weighted average approach’ will be applied to existing allocations.
 
In its communication Vodafone India says that it has some reservations on the effectiveness of the revised regime in fully addressing some of the fundamental underlying issues and concerns on the high level of SUC, but appreciated the decision of the Government, in advance of the auctions due to commence on 3 February 2014, and earnestly requested that the details of the decision be notified formally as a part of the NIA.

It wanted to know that in the case of 2.1GHz spectrum acquired in 2010, the weighted average approach approved by the E-GOM will be extended to the 2.1GHz /3G spectrum from the date of its allocation.
 
 VIL asks for a consideration that going forward, since there is virtually no distinction between the mobile services that will be offered on 3G and BWA, Government should apply SUC at 1% AGR for both 2.1GHz/3G and BWA, with a weighted average for existing spectrum allocations in 900/1800MHz.
 
“VIL seeks confirmation that in the case of 1800MHz spectrum acquired in November 2012, the existing allocations of 900/1800MHz spectrum will be removed from the earlier slab at the time of extension resulting in a change in the applicable SUC rate for the spectrum acquired in November 2012 as spectrum acquired/re-assigned at market discovered/related rates post 2010 will attract SUC at 5% of AGR”, it said.
 
The letter is related to implementation of Empowered Group of Minister’s decisions on spectrum usage Charges.

On the effect of this decision on the company’s future and existing allocations, the company submitted that that as per the E-GOM decision, if VIL acquires additional spectrum in the auctions scheduled to commence in February 2014, the same will attract SUC at 5% AGR and a weighted average SUC will be charged on VIL’s existing allocations.

To illustrate, if VIL acquires additional 5MHz 1800MHz spectrum, in say Delhi service area, the same will attract an SUC of 5%AGR. VIL already has 10MHz 900/1800MHz spectrum for which the company is paying SUC at 6%AGR.