Currently, LF is 8% while SUC varies between 3% to 6% for different operators.
Communications Minister Ravi Shankar Prasad is scheduled to meet top bosses of telecom operators on July 27 to discuss the financial condition of the industry and how the government can help in offering some support. According to sources, the department of telecommunications (DoT) has already written to the telecom operators regarding the planned meeting. While setting up a committee under telecommunications secretary Aruna Sundararajan to look into the entire issue of rationalisation of various levies a couple of week ago, the minister had said that he would soon call the operators for a discussion regarding the issues plaguing the sector.
By the time of the meeting, the committee is also expected to submit its report. This will be the minister’s first meeting with industry honchos after assuming charge of the communications ministry. Agreeing that there has been a financial stress in the sector, the minister has asked the department to revisit various spectrum charges and also ease of doing business.
The industry has for long been demanding lower taxes and levies, which add up to about 30% of their revenues and in the previous tenure of the NDA government, a telecom policy statement also said such levies would be rationalised. The outstanding industry debt is pegged at over `4.3 lakh crore at the end of March 2019.
In fact, in the past, the telecom regulatory authority of India (Trai) has recommended lowering of certain levies by way of providing financial relief to the operators. For instance, it has recommended fixing a flat spectrum usage charge for operators at 3% of their adjusted gross revenue (AGR) and gradually decrease it to to 1%. The idea was that since operators pay high prices in auctions, SUC should cover only administrative cost, which should be marginal.
Industry body cellular operators association of India (COAI), had also conveyed its wishlist for the new government. The body had sought a roadmap for reduction in levies, starting with a cut in licence fee and spectrum charges within 6-9 months while also demanding review of the definition of AGR. Telcos pay licence fee (LF) and spectrum usage charges (SUC) on the basis of their AGR. Currently, LF is 8% while SUC varies between 3% to 6% for different operators.