COAI seeks floor price for mobile services from April

NEW DELHI: The Cellular Operators Association of India has urged the government to ensure that consumers pay a minimum floor price for using mobile services from April, and that licence fee and spectrum usage charges be brought down to alleviate financial stress in the sector.

“Floor pricing is imperative to ensure the sector is sustainable, and in a position to bear the deferred spectrum and adjusted gross revenue dues, while continuing to invest in world class networks and services,” COAI said in a letter dated 26 February.

Mint has seen a copy of the letter. The industry body represents Vodafone Idea, Bharti Airtel and Reliance Jio.

The court had last year upheld the government’s definition of AGR, on which it calculates levies on telecom operators. The order dealt a blow to the telecom industry, which argued that AGR should only include revenue from core telecom operations. Telecom operators now have to pay dues for the past 14 years, along with interest and fines.

Companies have been left scrambling to pay dues after the Supreme Court on 14 February pulled them up for failing to comply with its October verdict.

Vodafone Idea is the worst hit by the verdict, with the top court directing it to pay an estimated ₹50,000 crore in past dues. It has so far paid ₹3,500 crore to the government.

“With the recent AGR judgement, the situation has become even more critical,” COAI said, adding that “the industry therefore requests support from the government to take steps to make the telecom sector sustainable”.

The industry body has sought that the GST credits lying with the government be adjusted against the dues payable by telcos.

It has also sought that after this adjustment, the payment of balance amount of interest, penalty, and interest on penalty be allowed in a staggered manner.

“It is requested that a moratorium of 3 years be provided, as we expect that it will take at least that much time to recover the health of the sector, followed by a payment tenure of 15 years at a simple interest of 6%,” COAI said in the letter.

The government may consider granting loan equal to the AGR amount at 6% rate of interest so that the AGR liability maybe discharged immediately, the industry body said.

COAI’s letter comes just a day after Vodafone Idea sought the same sops from the government.

It also comes a day before the Digital Communications Commission, which has representatives from DoT, ministry of finance, ministry of electronics and information technology and NITI Aayog, will meet on Friday following a series of meetings between Vodafone Idea chairman Kumar Mangalam Birla and top government officials.

Birla met telecom secretary Anshu Prakash on 18 February and followed it up by meeting finance minister Nirmala Sitharaman the next day.

After last week’s meetings, the finance ministry and DoT have started discussions on possible relief measures to prevent the telecom sector from becoming a duopoly.