The Cellular Operators Association of India (COAI), the industry body representing the telcos, on Thursday urged the government to reduce the license fee from 3 per cent to 1 per cent, abolish USOF levy and clearly define the term “Gross Revenue from telecom activity".

The industry body, which has Reliance Jio, Vodafone Idea, Bharti Airtel as its members in their memorandum submitted to the finance ministry for the forthcoming interim budget suggested measures to enhance the financial well being of the sector.

“The recent forward-looking reforms signal a positive intent towards a robust and future-ready telecom sector, capable of fuelling India’s digital ambitions.

"But, to fully realise this potential, we must address the financial constraints impeding the sector’s expansion. Reducing levy burdens is not just an economic necessity, but a strategic investment in our digital future,” S.P. Kochhar, director-general at the COAI said.

The COAI has held the view that ideally Universal Service Obligation Fund (USOF) levy should be abolished. However, if that is not possible, the USO contribution of 5 per cent of adjusted gross revenue (AGR) may be suspended till the existing USO corpus (Rs 77,000 crore) is exhausted.

Further, license fee should be brought down from three per cent to one per cent at the earliest to cover only administrative costs by the Department of Telecommunications (DoT)/ government.

On definition of GR, it said the present definition of GR includes revenue from all telecom activities, and the term telecom activity is not defined but may include revenue from activities believed to be incidental to telecom activity.

“Therefore, the definition of GR should make it abundantly clear that the revenue from activities for which no license is required, should not be a part of GR,” COAI said in the recommendations.