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Reliance Jio voices concern

New Delhi, Dec. 30 (PTI): Reliance Jio Infocomm has opposed any change in rates for the use of radio waves by mobile operators.

“Unilateral increase in SUC (spectrum use charge) for BWA (broadband wireless) spectrum from 1 per cent to 3 per cent will be illegal. The government may take appropriate decisions on SUC for the forthcoming auctions but without altering the present regime, either directly or indirectly, for already allocated/auctioned spectrum,” Mukesh Ambani-led Reliance Jio said in a letter to the telecom secretary.

Levied annually by the government as a percentage of revenue earned by operators from telecom services, SUC varies from 3-8 per cent.

A uniform SUC, if implemented according to the recommendations made by the Telecom Regulatory Authority of India (Trai), will provide relief to operators such as Airtel, Vodafone and Idea, but will increase rates for broadband wireless access (BWA) spectrum holders such as Reliance Jio.

The letter comes at a time the Telecom Commission is looking at the issue of spectrum fee and is supposed to send its recommendations to the empowered group of ministers on telecom, headed by finance minister P. Chidambaram. A meeting of the commission scheduled for tomorrow has, however, been cancelled.

The company said the terms and conditions of notices inviting application, the main document for the spectrum auction, are equally binding on both the department of telecom and the bidders and “any post facto deviation in auction rules which extends undue benefit to incumbent operators will not stand judicial scrutiny”.

Reliance Jio said companies while buying spectrum in auctions factor in conditions, including SUC, in their bid amounts with the expectation that the conditions would not be altered.

“Retrospective reduction in the SUC would not only cause a huge loss to the government but also would have deprived some operators to acquire spectrum through these auctions,” Reliance Jio said.

The department of telecom estimates that lowering of the spectrum use fee, according to Trai’s recommendations, will cause the national exchequer a minimum loss of Rs 3,738 crore over a period of 20 years on the renewal of the six licences belonging to Airtel, Vodafone and Loop Mobile that are due to expire in 2014.

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