In what may come as some relief to the country’s telecom operators, the Department of Telecommunications has proposed that the payment towards the universal service obligation fund (USOF), which is paid as part of the licence fee, be reduced by 2% — which would slash the total fee paid by operators to 6% from 8%, according to Indian Express.
It is estimated that telecom operators could benefit to the tune of Rs 3,000 crore if this proposal is accepted. The DoT has submitted this proposal to the Digital Communications Commission (DCC).
The DCC is a broad-based government body which includes representatives from the Ministry of Finance, Department for Promotion of Industry and Internal Trade, Ministry of Electronics and Information Technology and NITI Aayog, besides the Department of Telecommunications.
Obtaining an approval from DCC will mean the DoT can overlook the Committee of Secretaries that had opposed the move to reduce the licence fee. TRAI has already recommended this reduction in USOF and therefore the proposal from the DoT may sail through.
The DoT, however, is silent on the larger AGR dues of Rs 1.45 lakh crore that telecom operators are forced to contend with, following the order of the Supreme Court. The operators have already been struggling with mounting losses due to the cut-throat competition. Vodafone Idea has stated that they may consider closing down operations if the government does not intervene and offer some relief. Telcos are at least hoping that they will be given a longer duration to pay off the sum.
This is expected to be a particularly bad year for the government as far as revenue collection is concerned and it won’t be easy getting it to agree to drop or delay collecting this huge amount.
On the USOF, TRAI has said the funds, originally meant for improvement of rural telephony has not been utilised beyond 50%.
As per the IE report, this proposal by DoT for a reduction of 2% will be submitted to DCC soon.