The Cellular Operators Association of India (COAI), an industry body, that advocates for telecom providers, has appealed to the government to reduce the license fees levied on telecom operators.
New Delhi: Several private telecom providers, including Reliance Jio, Bharti Airtel, and Vodafone Idea, have announced new prepaid and postpaid plans effective the first week of July 2024. Telecom operators have been strongly advocating the need for tariff hikes in the industry to expand services and investments made in 5G services. This tariff increase prompted many consumers to switch to the public telecom provider, Bharat Sanchar Nigam Limited(BSNL). However, recent reports suggest that private telecom companies may consider reversing the recent price hikes, contingent on upcoming government decisions.
The Cellular Operators Association of India (COAI), an industry body, that advocates for telecom providers, has appealed to the government to reduce the license fees levied on telecom operators.
At present, the license fee is set at 8 per cent of total revenue, which encompasses a network obligation charge of 5 per cent. The COAI is advocating for a revised fee structure that would lower this license fee to between 0.5 percent and 1 percent. They argue that reducing these fees would enable more efficient network upgrades and expansions.
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An important aspect of this discussion is the historical context of the license fee structure. The COAI contends that the original justification for the current fee—based on its relationship with the spectrum—has significantly weakened since 2012, when the fee was decoupled from the spectrum, which is now allocated through a transparent auction process. As a result, it has been proposed that the license fee should be restricted to covering only the administrative costs related to the licensing process.
According to the IndiaTV report, the Director General of COAI, SP Kochar, has expressed that the continued high license fees, especially after the removal of previous spectrum-related justifications, are unjustified. He argues that the fee should be adjusted to reflect only administrative expenses, rather than the current excessive rate.
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Moreover, telecom operators argue that if the government and the telecommunications regulator accept this demand, it could bring significant benefits to the industry. During the recent India Mobile Congress(IMC), several officials highlighted that current financial pressures—including obligations to pay Adjusted Gross Revenue (AGR), Corporate Social Responsibility (CSR) contributions, Goods and Services Tax (GST), and corporate taxes—severely limit their ability to invest in technological advancements. As a result, these fiscal constraints put telecom companies at a disadvantage compared to other sectors.
The 8th edition of India Mobile Congress (IMC) 2024, Asia’s largest telecom, media, and technology forum, concluded on a high note on October 21, attracting a record-breaking participation of over 1.75 lakh attendees.
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The event was inaugurated by Prime Minister Narendra Modi, who emphasized the importance of global standards for ethical artificial intelligence (AI) and data privacy, while also underscoring India’s potential to drive the development of 6G technology.
IMC 2024 provided a vibrant platform for showcasing over 900 technology use cases, including 750 AI-based applications. The event featured 186 sessions, engaging more than 820 speakers from around the world, who discussed themes such as 5G, 6G, AI, Internet of Things (IoT), quantum computing, cybersecurity, and electronics manufacturing.
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