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Budget 2026-27: The telecom industry in India has asked the government to reduce regulatory and tax burdens ahead of the Union Budget 2026-27, saying that continued investment in next-generation networks depends on quick financial support to achieve the goal of a Viksit Bharat.
On Tuesday, the Cellular Operators’ Association of India (COAI), which represents major mobile and internet service providers like Reliance Jio, Bharti Airtel, and Vodafone Idea, proposed reducing the telecom licence fee from 3% to just 0.5–1%, saying this would be enough to cover only administrative costs.
The telecom industry asked the government to lower the GST on spectrum payments, license fees, and spectrum usage charges from 18 per cent to 5 per cent. COAI said this would not reduce the government’s revenue but would help telecom companies manage their taxes better.
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Telecom Operators License Fee
At present, telecom operators pay 3% of their revenue as a licence fee and 5% to the Digital Bharat Nidhi. COAI has requested lowering the licence fee to just 0.5–1%, saying this would be enough to cover basic administrative costs.
“COAI has been advocating measures that would reduce the sector’s financial burden, enabling further expansion and rollout of next-generation connectivity to achieve the goal of a Viksit Bharat,” said Lt. Gen. Dr. S.P. Kochhar, Director General of COAI.
The Director General of COAI added that the licence fee, which combines the licence (3% of AGR) and Digital Bharat Nidhi contribution (5% of AGR), is a significant financial burden for licensed telcos. He further mentioned, “The Digital Bharat Nidhi contribution should be paused until the unused corpus has been fully utilised by the Department of Telecommunications.”
COAI Recommends Special Benefits
Meanwhile, COAI has recommended giving telecom operators special benefits under GST, such as exempting GST on regulatory payments like licence fees (LF), spectrum usage charges (SUC), and spectrum assigned through auctions. COAI also suggested allowing the use of existing input tax credit (ITC) balances to pay GST under the Reverse Charge Mechanism (RCM) on LF and SUC. This would not only protect cash flow for telecom companies but also help in using up the accumulated ITC.
Lt. Gen. Dr. S.P. Kochhar, Director General of COAI, stated, “Since telecom today is no longer just a vertical, but a horizontal value-added enabler for all other sectors, a recalibration of spectrum pricing and assignment models is also necessary.” (With IANS Inputs)
