The Telecom Regulatory Authority of India (Trai) has asked the department of telecommunications (DoT) to review the licence fees and spectrum usage charges paid by telecom operators and quickly resolve issues related to gross revenue and adjusted gross revenue which are being litigated in various forums.
In its “Inputs for Formulation of National Telecom Policy- 2018", made public on Friday, Trai said that there is a need to review the rates of levies paid by operators since access spectrum is now being assigned through auction, and telecommunication networks have become the underlying infrastructure for growth of the digital economy.
Adjusted gross revenue (AGR) is the basis on which DoT calculates levies payable by operators and has been a bone of contention in the sector. The matter is under litigation as operators argue that AGR should comprise revenue from telecom services, but DoT insists that AGR should include all revenue earned by an operator, including that from non-core operations.
Telecom operators are liable to pay around 3-5% and 8% of the AGR as spectrum usage charges and licence fees, respectively, to DoT. Operators, facing stress on their revenue streams due to increased competition after the entry of Reliance Jio Infocomm Ltd, have pitched for a cut in these levies.
“A review of gross revenue and adjusted gross revenue would assist in enhancing clarity and removing ambiguities," Trai said in its recommendations.
DoT had written to the regulator in August seeking inputs for the new telecom policy which the government aims to put in place by the end of this fiscal year.
Trai has suggested that government departments should be encouraged to free up underutilized or substitutable spectrum, and added that audit and accounting of the spectrum in use by various governments and private entities was essential.
Moreover, the proposed policy should be looked at with a much wider perspective as it would affect the complete information and communication technology sector.
“The authority is also of the view that the proposed policy should be titled the National Information and Communication Technology Policy-2018," Trai said.
To provide a suitable environment for the Internet of Things (IoT), Trai has suggested that DoT identify and make available new spectrum bands for timely deployment and growth of 5G network, and earmark suitable licensed and unlicensed spectrum for IoT.
IoT enables devices such as smartphones, wearables, home appliances and vehicles to connect and exchange data. 5G is the next generation wireless access technology which not only promises higher data capacity and speeds faster than 10GB per second but also possesses the capacity to connect billions of devices.
In order to speedily roll out infrastructure, it is necessary that Right of Way permissions be granted expeditiously at reasonable charges and in a non-discriminatory manner to the service providers, Trai said, adding that the government should promote resource sharing.
“We support Trai’s recommendations on simplifying the licensing and regulatory frameworks and rationalising taxes, levies and related compliance by 2019 and we expect that the same would be done at the earliest, this year itself. We hope that the simplification of compliance includes reduction in the multiple audits, which will save the cost and efforts of the operators," said Rajan S. Mathews, director general of the Cellular Operators Association of India.
“We hope that the government will extend both urgent relief and address these systemic issues outlined by the industry, aligned with the recommendations issued by Trai," Mathews added.