COAI Seeks Reduction in Licence Fee to 1 Percent, Waiver in Customs Duty for 5G Network Equipment

Mobile operators' association COAI has urged the government for a cut in licence fee to 1 per cent, and sought waiver of customs duty on network equipment for 5G rollout.

In its Budget wishlist submitted to the finance ministry, the Cellular Operators' Association of India (COAI) has also pushed for abolition of the Universal Service Obligation Fund or USOF.

The apex telecom association has urged the government for rationalisation of GST, reduction of licence fee to 1 percent from 3 percent and waiver of customs duty on 5G network equipment.

During the pre-Budget discussions held on Monday, COAI also sought the removal of GST on licence fee, spectrum usage charges and payment of spectrum acquired in auctions.

Other demands include refund of accumulated input tax credit of GST (Rs. 32,000 crore) and clarification regarding availability of input tax credit on critical equipment installed on telecom towers.

COAI counts telecom operators like Reliance Jio, Bharti Airtel and Vodafone Idea as its members.

COAI on Tuesday made a strong pitch for OTT (over-the-top) communication services to directly compensate telcos for data traffic they are driving onto the networks, as it advocated a licensing and light-touch regulation framework for such services. COAI Director General SP Kochhar said the association, as part of the draft telecom bill, has given its suggestions on how OTT communication services should be defined to ensure there is no ambiguity. 

Other aspects like the exact financial model for OTT communication services to compensate telecom service providers will be made to the government going forward as and when the nuances of framework for light-touch regulation is discussed, Kochhar added. OTT communication services include the likes of WhatsApp, Signal, Google Meet, Telegram and other similar apps.