In India, not only one needs to acquire spectrum through auctions but also has to pay for its usage. Payment has to be made @ % of AGR (Adjusted Gross Revenue). Now, different auctions have spelt out different rules — making the SUC (Spectrum Usage Charge) payment rules the most complex in the world. So much so, that one needs a good understanding of the subject (including maths) in order to make the necessary calculations. This makes the implications of GOI’s simple announcement of not charging SUC for spectrum acquired through future auctions, very difficult to understand. In order for us to appreciate this fact, we need to understand how SUC calculation work.
How SUC is Calculated?
SUC is calculated based on a complex weighted average (WA) formula. Though this formula is simple to understand, however, the changing rules for SUC over the years have made this formula extremely complex. Let me make an attempt to simplify it.
