Telecom body COAI wants the Centre to scrap licence fees as they were a “double whammy” on the operators.

“The TSPs (telecom service providers) buy the spectrum for utilisation through transparent auction processes, paying a substantial amount for receiving the right to use the same.”

“At the same time though, payments are also charged based on the AGR (adjusted gross revenues) on the TSPs, which is a double whammy on them, given the huge investments made towards procuring the spectrum,” S.P. Kochhar, director-general of the Cellular Association of India (COAI), said.

The COAI has approached the DoT (department of telecommunications) after the Supreme Court on September 19 rejected a curative petition of the telcos to recalculate AGRs.

Kochhar said: “To illustrate the same (double-whammy), we could take the example of consumers buying a property. The consumer pays for the property based on its price and does not pay any tenancy fee to stay in that property.”

“However, in telecom, the TSPs buy the spectrum at huge prices, and thereafter, also make substantial AGR-related payments for the same. This would amount to buying a house and paying the tenant’s rent for the same as well!”

The industry body representing private operators Reliance Jio, Bharti Airtel and Vodafone Idea said the move would allow the operators to plough back revenues into the upgrade of their networks and offer state-of-the-art services to consumers.

“It would further enable faster digital inclusion, especially in the remote areas, and help ease the life of the common man. We urge the government to consider our request for abolition/reduction of the AGR-related fees at the earliest,” it added.

The payment of licence fees was a valid measure when licences were bundled with spectrum at the time of the introduction of the National Telecom Policy 1994.