The telecom industry is witnessing a lot of turmoil. Companies have demanded to reduce the license fees. There has been a demand to reduce the license fee from 0.5% to 1%. Currently this fee is up to 8%. There has been a demand from the industry to consider this immediately. The circumstances have been completely changed. The industry says that if these fees are reduced then it will be easier to upgrade and expand the network.
Continuous work is also being done to improve the digital network. It has been said by 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, 5% Universal Service Obligation is charged by the companies.
Telecom companies said the license fee was reasonable when the license was linked with spectrum. But in 2012, spectrum was delicensed and is now being allocated through a transparent and open auction process.
“After de-licensing the spectrum and allocating it at market price, the justification for imposing a license fee had long ago ended. The license fee, at most, should cover only the administrative expenses of the license, which is 0.5 of the total revenue. % to 1%, instead of the current 8%,” COAI Director General SP Kochhar said in a statement.
Telecom companies believe that the government and the telecom regulator also accept that profits in the industry are low and some executives even mentioned this during the recently concluded India Mobile Congress.
COAI said that telecom companies in India, apart from paying telecom-related AGR amounts, also pay CSR, GST and corporate taxes like other companies. “This puts companies engaged in the telecom business at a significant disadvantage compared to other businesses, limiting their surplus for investment in regular technological upgrades,” Kochhar said.