Vodafone India, which has 194 million mobile customers with over 100 million in rural areas, has welcomed India government’s initiative to reduce subscriber usage charges (SUC) to 3 percent from 5 percent of adjusted gross revenues (AGR).

The telecom sector is severely debt laden with more than Rs 3 lakh crore. The reduction in SUC charges from 5 percent to 3 percent will free cash-flows which can be invested towards further enhancing network and customer experience.

Sunil Sood, MD and CEO of Vodafone India, said: “Harmonizing the available spectrum to offer additional quantum via auction is another progressive step by the Government (after spectrum trading and sharing), to maximize efficiency of this precious resource.”

“With Digital India as the guiding vision and consumer demands evolving from voice to data, the telecom industry increasingly needs more of quality spectrum to be made available at reasonable prices. An efficient spectrum also directly results in providing customers with a superior network experience,” Sood said.

Meanwhile, COAI, the telecom industry body for GSM operators,  on Tuesday urged the Department of Telecommunications to further reduce SUC to 1 percent. The demand is despite the government’s plan to reduce spectrum usage charges (SUC) to 3 percent of adjusted gross revenue from 5 percent.

“We request that to start with SUC at a uniform rate of 3 percent be made applicable for all spectrum, which may be further reduced to 1 percent in a phased manner,” said COAI director general Rajan S Mathews in a letter to Telecom Secretary JS Deepak on Tuesday.