Private Telcos write to DoT, FM and Cabinet Secy; demand Telecom Relief Package

The COAI has written to the DoT, the finance ministry, and the Cabinet secretary seeking the much-awaited telecom relief package. The telecom firm talked about all types of levies, tenure of spectrum lease, and easier payment terms for statutory dues.

COAI Writes to the Govt for Telecom Relief Package

Talking about the regulatory burden on TSPs, Kochhar said, "as per estimate a pan India TSP submits approximately 21000 compliances in a year to various authorities. It is a huge regulatory burden… There is a need to review and reduce to bare minimum the compliance, approval and audit requirements by replacing the same with self-certification/exceptional audits and rationalised penalties".

SP Kochhar, Director-General, COAI, said in a letter dated August 17, 2021 to telecom secretary Anshu Prakash, "Indian telecom sector remains one of the most heavily taxed sectors. The Government needs to recognize that the current revenue sharing regime of around 32% of revenue outgo as taxes and levies is unsustainable and will always be detrimental to growth of the Industry due to perennial lack of surplus cash to reinvest".

The telcos have also demanded a redefinition of AGR, in such a way that it includes only telecom revenues. Kochhar said in the letter, "the telecom levies should be applicable only on revenue from telecom services apart from various other deductions. TRAI recommendations are already available which were reportedly not considered during the pendency of AGR case in Hon’ble Supreme Court can be accepted on priority and implemented".

Along with AGR reconfiguration, the telcos have asked the government to complete the TRAI consultation paper on floor pricing. Notably, Bharti Airtel and Vodafone Idea both have been vocal proponents of the floor pricing system; Reliance Jio has said that it will make the telecom sector "non-competitive".

The Numbers The Telcos Want

The telcos are seeking a doubling of the tenure of the existing spectrum holdings. Right now, the telcos have to renew the same after every 20 years; now, they are seeking a 40-year term on spectrum rights. Also, the telcos have asked the government to consider a moratorium of upto 10 years for spectrum payments. Along with these, COAI said that government should consider reducing interest on deferred spectrum payments to 4% or less.

Kochhar added, "this will give sufficient impetus to the investors and would be a massive reassurance for the lenders and would help ensure better finances to the TSPs".

Along with this, the telecom sector has asked for a reduction in license fees. As of now, the telcos are liable to pay 8% of AGR as license fees; the telcos have also demanded a reduction by 75% to 2% of AGR. The telcos have also demanded a reduction in SUC; the industry also wants reduction by 3% for all operators. Right now, the SUC varies from 3% to 6%, depending on the band and the circle.

Right now, the license fees consists of two parts - general exchequer and the USOF. Currently, the rates for those two are 3% and 8% of AGR. As such, COAI has also asked the government to reduce the same to 1% each.