Telecom companies seek cut in license fee
telecom industry has demanded that the license fee paid by them to the government should be reduced to 0.5% to 1% of the gross revenues, from the current 8%, as the circumstances and regime have changed for the industry.
The industry said a reduction in fees would facilitate telcos to plough the revenues back to the network for upgradation and expansion, which will enable digital inclusion.
The Cellular Operators Association of India (COAI), which counts all the three private telecom operators –Reliance Jio, Bharti Airtel and Vodafone Idea –as its members, said, payments made basis the AGR (adjusted gross revenue) need to be reconsidered under the changed regime and circumstances. Telcos pay an 8% license fee to the government, which includes a 5% universal service obligation (USO) levy.
The telcos said it was appropriate to have a license fee when licenses were bundled with the spectrum. But spectrum was delinked from the license in 2012 and is currently assigned using a transparent and open auction procedure.
“With the separation of spectrum from the license and assigning it at market price, the justification for imposing licence fee as well ceased to exist, long back. The license fee, at best, should cover the cost of administration of the license only, which is to the order of 0.5% to 1% of the gross revenues, instead of the 8% paid currently,” COAI Director General SP Kochhar said in a statement.
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