Govt’s SUC Waiver to Save Vodafone Idea, Jio & Airtel Crores

The Indian government is planning to waive Spectrum Usage Charges (SUC) for airwaves purchased before September 2021, providing major financial relief to telecom companies like Vodafone Idea, Airtel, and Jio. This move could save them thousands of crores as they continue to expand 5G services and improve their networks.

Why Is This Important?

• The government removed SUC for spectrum auctioned after September 15, 2021, but older purchases were still subject to charges.

• Now, the waiver is likely to extend to pre-2021 spectrum, significantly reducing costs for telecom operators.

How Much Do Telecoms Pay in SUC?

• Currently, telecom companies pay 3-4% of their Adjusted Gross Revenue (AGR) as SUC.

• Additionally, they pay an 8% license fee, which includes a 5% Universal Service Obligation Fund (USOF) contribution.

Who Benefits the Most?

• Vodafone Idea: The biggest beneficiary, facing a ₹2 lakh crore debt, may get relief of around ₹8,000 crore.

• Airtel & Jio: Will also see significant savings, allowing them to invest more in network expansion.

Challenges for Vodafone Idea

• The company is struggling to pay its AGR and spectrum dues.

• Vodafone Idea’s CEO has urged the Department of Telecommunications (DoT) to convert its dues into government equity, which could increase the government's stake to 49% from 22.6%.

• The company lacks funds to pay ₹6,091 crore as a bank guarantee or ₹5,493 crore in cash for past spectrum dues.

Competition from Starlink

• Elon Musk’s Starlink is entering India with a ₹2-lakh-crore venture, but it will still have to pay SUC, unlike telecom firms.

• The government believes companies receiving spectrum without an auction should continue paying SUC.

What’s Next?

• The waiver is expected to be announced soon, giving telcos a much-needed financial breather.

• The DoT is also working on a revised relief package for struggling telecom firms, particularly Vodafone Idea.

This decision is crucial as India’s telecom sector faces increasing financial pressure while preparing for 5G expansion and global competition.