New Delhi: In an effort to further revitalize the telecom industry, Cellular Operators Association of India (COAI) on Monday released the telecom industry recommendations to the Finance Ministry for the upcoming Union Budget 2025-26.

In the current scenario of huge capital investment by Telecom Service Providers (TSPs), especially for 5G deployment, COAI recommended that the Universal Service Obligation Fund (USOF) levy be scrapped.

“Alternatively, the government may consider suspending the USO contribution of 5 per cent of AGR till the existing USO corpus of over Rs 86,000 crore is exhausted,” the apex telecom industry body said.

COAI also recommended that the license fee be immediately reduced from 3 percent to 1 percent, so that it covers only administrative expenses of DoT/Government, thereby relieving TSPs of additional financial burden. .

The industry is also concerned about the current definition of gross revenue (GR), as it covers revenue from all telecom activities.

COAI also recommended that the definition of GR be made precise, stipulating that income from activities that do not require a license should not form part of GR.

“Furthermore, we strongly believe that Large Traffic Generators (LTG) should take responsibility to participate in the development of telecom infrastructure because they ride on the networks built by telecom companies, earn profits, but the infrastructure do not pay anything for its creation,” said COAI.

It recommended that LTGs should contribute to the USO Fund/Digital Bharat Nidhi Fund and thereby contribute to the Indian digital economy.

Due to intense price competition in the market, the telecom industry in India has consolidated from over 10 companies to 3 private and 1 public sector company in 2017, which is an optimal structure and encourages healthy competition. is

“Apart from the above, cash flows and estimates of some telecom industry players have also been adversely affected in the wake of the 2019 Supreme Court judgment, in the context of the calculation of Adjusted Gross Revenue (AGR), which Telecom operators are required to pay additional AGR dues over a longer period of time, based on revised calculations,” said COAI.

COAI also requested the government to clarify that service tax is not payable on additional license fee (LF) and spectrum usage charges (SUC) arising out of the Supreme Court’s AGR decision.

Over the last 5-6 years, the government has gradually increased the customs duty on telecom equipment to 20%, putting a significant burden on telecom companies. The financial burden has come and significantly affected the rollout of 5G services in India.

COAI has requested exemption from BCD levy on telecom equipment under CTH 8517, which was extended from 11 October 2018, which will reduce the cost challenges associated with the deployment of this critical infrastructure.



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