Telecom companies have demanded reduction in license fees. A reduction of 0.5% to 1% has been sought in the fees. Companies say that this will help in network upgrade and expansion. Currently, the license fee is up to 8%. The industry has said that this fee is also necessary to improve the digital network.
The telecom industry is witnessing a lot of upheaval. Companies have demanded a reduction in license fees. There has been a demand to reduce the license fee by 0.5% to 1%. Currently, this fee is up to 8%. The industry has demanded immediate consideration on this. The situation has completely changed. The industry says that if this fee is reduced, it will become easier to upgrade and expand the network.
Digital network to be improved
Continuous work is also being done to improve the digital network. This has been said by the Cellular Operators Association of India (COAI) and its three main telecom operating companies are Jio, Airtel and Vodafone Idea. Currently, out of the total 8% license fee, companies charge 5% as Universal Service Obligation.
License fees not reasonable
Telecom companies said that when licenses were linked with spectrum, the license fee was reasonable. But in 2012, spectrum was delinked from licenses and is now being allocated through a transparent and open auction process.
"By delinking spectrum from licenses and allocating it at market prices, the rationale for levying license fee has long since vanished. The license fee should, at most, only cover the administrative expenses of the license, which is in the range of 0.5% to 1% of total revenue, instead of the 8% being paid currently," COAI director general SP Kochhar said in a statement.
Telecom companies believe that the government and telecom regulators also acknowledge that profits in the industry are low and some officials even mentioned this during the recently concluded India Mobile Congress.
COAI said telecom companies in India, apart from paying telecom-related AGR amounts, also pay CSR, GST and corporate tax at the same rate as other companies. "This puts companies engaged in the telecom business at a significant disadvantage compared to other businesses, thereby limiting their surplus for investing in regular technological upgrades," Kochhar said.