Mukesh Ambani-backed broadband services company Reliance Jio Infocomm has raised concerns about the telecom regulator’s proposal to introduce uniform spectrum usage charges.

In a letter to the Telecom Department, Reliance Jio said that the TRAI’s proposal goes against the rules specified at the time of auctioning broadband spectrum in 2010.

As part of the recommendations on spectrum pricing issues on September 9, the TRAI mooted a flat spectrum usage charge of 3 per cent of the operator’s annual revenue for all telecom companies. This would hurt Reliance Jio because under the auction rules announced in 2010, operators with broadband spectrum are supposed to pay only 1 per cent of the annual revenues.

“Any post-facto increase in spectrum usage charge at this stage violates the terms and conditions of the contract, will adversely affect the business viability of the broadband wireless spectrum holders and is legally untenable. It will also vitiate investors’ sentiments which are already at the lowest ebb,” Reliance Jio said in a letter to the Department of Telecom.

Discriminatory

The company said that the TRAI recommendation is discriminatory because, on one hand, the proposal hurts broadband players and, on the other, benefits incumbent players because they currently pay 8 per cent of their revenues as spectrum charges.

The TRAI has justified the move to increase the spectrum charge for broadband players on the ground that spectrum was given in 2010 primarily for data services but technological advancements now allow players to offer other services, including voice, using the same spectrum. The regulator said that the broadband players can effectively offer all services being extended by a unified telecom licence holder and therefore, the spectrum charges should be the same for both.

The TRAI said that any difference in spectrum charges could open up the possibility of arbitrage as it was not possible to segregate revenue earned from broadband and voice telephony subscribers.

Reliance Jio has rejected the TRAI’s justification saying that the auction rules had already made it clear that the broadband spectrum can be used for any type of service, including voice. “The concern of the regulator is also unfounded. If the revenues can be bifurcated for the two types of spectrum allocation being used for 2G services, then why it will not be possible to segregate the subscriber of 4G networks using broadband spectrum,” it said.

DoT panel

The DoT has, meanwhile, set up a committee to look into the proposals given by the TRAI. Other players, including Sistema Shyam, have also raised concern over the constant change in the rules of the game as it impacts foreign investors’ sentiments.

thomas.thomas@thehindu.co.in

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