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CCEA approves spectrum usage charges at 5 Percent of revenue

The cabinet committee on economic affairs (CCEA) on Thursday cleared a proposal for fixing the spectrum usage charge (SUC) paid by telecom operators in India at a maximum of 5 Percent of their adjusted gross revenue (AGR). The empowered group of ministers headed by finance minister P. Chidambaram had cleared the proposal in its meeting on Monday and forwarded it for final clearance to the CCEA. Broadband wireless access spectrum holders will continue to pay 1 Percent of the revenue.

AGR is the revenue that directly accrues to a telco’s books, less the taxes that go to the government and interconnection charges payable to other telcos. Older operators with more spectrum like Bharti Airtel Ltd and Vodafone India Ltd will see a cut in their payout of 8 Percent in most telecom circles, or operating areas, Mint reported on Monday. Currently, the telcos pay 3-8 Percent of their AGR as SUC. The new SUC is higher than the 3 Percent flat rate suggested by the Telecom Regulatory Authority of India in its September recommendations.

Source-On Request