Anil Ambani led Reliance Communications (RCOM) proposed a discount in license fee, taxes, spectrum usage charges (SUC) and other deferred payment owed to the government by telecom companies, to ease the financial stress on service providers. In an investor’s presentation, RCOM also asks the government to remove interconnect usage charges (IUC) payable by one telco to the other for using the other’s mobile network for terminating calls. According to RCOM, due to unlimited calling packs, termination charges lead to more IUC payouts to other telcos, and not necessarily the same amount of return. The telco suggested the following rebates in telco’s payment liabilities: - Spectrum Usage Charges (SUC): The telco also wanted SUC to be set at a uniform rate of 1% and an option for payments to be made annually along with arrears if any. This is lower than the 3% SUC rate considered by DoT for 2016 auctions. SUC is payable by a telco to the government for providing mobile services, as a percentage of their Adjusted Gross Revenue. Note that DoT had issued notices to 6 telcos including RCOM for allegedly under-reporting their AGR, causing losses to govt. - License Fees: RCOM wants license fee rate to be lower at 5%, a reduction of 3% from existing 8%. Note that DoT had last dropped license fee rates in 2013. - Deferred Spectrum Charges: RCOM also wants the government to extend the repayment period of all existing liabilities owed by telcos on the basis of longevity of the spectrum…
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