NEW DELHI: The telecom industry has urged the finance ministry to sharply cut licence fees and temporarily pause mandatory contributions to the Digital Bharat Nidhi in the upcoming Union Budget, saying the current regulatory levies are limiting its capacity to invest in next-generation networks.
According to recommendations submitted ahead of the Budget, the industry wants the licence fee, currently at 3% of adjusted gross revenue (AGR), to be between 0.5% and 1%, and the 5% AGR contribution to the Digital Bharat Nidhi to be temporarily halted.
“The License Fee, which is a combination of the License (3% of AGR) and Digital Bharat Nidhi Contribution (5% of AGR), is a huge financial burden for the Licensed Telcos,” as per a submission by the Cellular Operators Association of India (COAI), the industry body representing private telecom operators, including Reliance Jio, Bharti Airtel and Vodafone Idea.
It added that the Digital Bharat Nidhi contribution “should be paused for the time till the unused corpus has been completely utilized by the Department of Telecommunications,” as per the statement by COAI director general Lt Gen Dr SP Kochhar.
The association said the sector has been advocating measures that would “reduce the sector’s financial burden, thereby enabling further expansion and rollout of next-generation connectivity to achieve the goal of a Viksit Bharat”.
The industry body has also flagged persistent goods and services tax (GST) issues, particularly the accumulation of input tax credit (ITC). “With a vast sum of money being accumulated in the ecosystem,” COAI recommended special relief under GST, including exemption of GST on regulatory payments such as licence fees (LF), spectrum usage charges (SUC) and auctioned spectrum.
