Indian telecom operators hand over close to 35% of their total earnings in spectrum charges and other outflows, the highest such burden than anywhere in the world, according to Lt Gen (Retd) Dr S.P. Kochhar, Director General of the Cellular Operators Association of India (COAI), who wants the government to bring that figure down now that telecom has become critical infrastructure for the economy rather than a standalone business.
Kochhar told Fe that he has been pressing the government to bring spectrum costs down to improve the overall health of the industry. That 35% figure reflects the cumulative cost of spectrum (acquisition cost amortized over the license period, plus usage charges) alongside license fees and other tariffs, as borne by operators’ balance sheets, not simply the direct levy the government collects each year.
The narrower, government-facing slice of that burden is the 8% of Adjusted Gross Revenue (AGR) telcos hand over annually as license fee (3%) and Digital Bharat Nidhi contribution (5%). The 35% figure is Kochhar’s shorthand for the sector’s total regulatory and spectrum cost load, while the 8% AGR levy is the specific, recurring piece.
Kochhar added that telco’s economic role has changed over the years. “Telecom today is no longer just a vertical, but a horizontal value-added enabler for all other verticals, which calls for a recalibration of spectrum pricing is necessary,” he said.
Continuing to tax the sector at legacy rates treats telecom as a standalone revenue source rather than the foundation other industries like healthcare, agriculture, education, financial services, he added.
TRAI’s latest full-year report, covering FY25, shows sector Gross Revenue rose 10.72% to ₹3.72 lakh crore, while AGR climbed 12.02% to ₹3.03 lakh crore. License fee collections rose up by 12.02% to ₹24,242 crore, while Spectrum Usage Charges rose 13.02% to ₹3,807 crore. The quarter ending December 2025, shows the pattern continuing- AGR grew 8.13% year-on-year, and license fee collections rose 8% year-on-year to ₹6,733 crore for the quarter.
Ahead of this year’s Union Budget, COAI formally asked the government to cut the license fee from 3% of AGR to just 0.5-1%, arguing the current 8% combined levy is holding back network investment. Kochhar said the Digital Bharat Nidhi corpus, formerly the Universal Service Obligation Fund should be held in abeyance until the funds already sitting unused in government accounts are spent, and separately pushed for GST on license fees and spectrum charges to be cut from 18% to 5%, to unlock capital currently trapped as unused input tax credit.
Independent data lends some further support to the industry’s broader cost complaint. GSMA Intelligence, which tracks spectrum pricing across roughly 250 operators in 100 countries, has found that cumulative spectrum costs average about 7% of operator revenue globally, which has risen 63% over the past decade.
It added that in the worst cases spectrum can consume up to 25% of revenue. GSMA has separately flagged that the India’s historically high reserve prices are among the steepest globally, a dynamic it warns could constrain 5G coverage and speeds if left unaddressed.
Meanwhile, the Union Budget’s estimates show telecom-linked government revenue (largely license fees and spectrum usage charges) projected at ₹1.17 trillion for FY27 was lower than the FY26 revised estimate, reflecting recent spectrum-related equity conversions and payment caps already extended to the sector.
Telcos have recently won two significant legal victories this year that eased some of their debt burden, an indicative that industry views the cost problem as integral.
In June, the Bombay High Court quashed roughly ₹23,600 crore in retrospective one-time spectrum charges (OTSC) that the Department of Telecommunications (DoT) had sought from Bharti Airtel and Vodafone Idea, ruling the government could not unilaterally impose new financial terms on licenses years after spectrum had already been allocated.
Additionally, in February, the Supreme Court ruled that spectrum is public property that cannot be treated as a recoverable corporate asset under insolvency proceedings. The decision clarified the status of spectrum. AGR-related dues owed by defunct operators like Reliance Communications and Aircel was however unresolved, and left the broader OTSC dispute still pending before the Supreme Court on appeal.