Trai recommends lower USO levy at 3%

The Telecom Regulatory Authority of India (Trai) has recommended a lower USO levy at 3%, which would bring down license fee to 6 per cent of AGR for operators.

The telcos are currently liable to pay 5% of their adjusted gross revenue (AGR) towards USO (Universal Service Obligation) fund.

Telcos pay 8 per cent of their AGR as licence fee to the government, of which 5 per cent go to the Universal Service Obligation Fund (USO Fund) and the rest 3 per cent to the government.

"With this reduction, the applicable uniform rate of licence fee would become 6 per cent (from the present 8 per cent) of AGR viz. the 3 per cent of LF that directly accrues currently to the government will not change," Trai said in its recommendations on definition of revenue base for the reckoning of licence fee and spectrum usage charges.

The USO fund was set up in 2002 by the DoT to provide mobile services and broadband connectivity in rural and remote areas of the country.

Trai recommended that with effect from April 1, 2015, the component of USO levy should be reduced from the present 5 per cent to 3 per cent of AGR for all licenses.

"Of the Rs 58,579 crore collected for the USOF between 2002-03 to 2013-14, Rs 33,683 crore remained unutilised as on March 31, 2014, representing 57 per cent of the USO levy collected," Trai said.

Trai said since 2010, about Rs 1,50,830 crore has been mopped up from spectrum auctions and telecom operators, excluding BSNL and MTNL, have paid around Rs 18,075 crore as spectrum usage charges (SUC) between 2010-11 to 2013-14.

"It is ironical that the industry is expected to continue a low tariff regime even as it asked to pay out high auction-determined spectrum prices. And, these spectrum prices are amongst the highest in the world," Trai said.

Trai also introduced the applicable gross revenue (ApGR), which would be equal to total gross revenue of operators as reduced by revenue from operations other than telecom activities, receipts from USO and income from rent, insurance claims among others.
"AGR then would be arrived be deducting pass through charges (deductions) from ApGR," Trai said.