Major private telecom operators, such as Reliance Jio, Bharti Airtel, and Vodafone Idea, have recently introduced new prepaid and postpaid plans, effective from July 2024. Telecom operators have been pushing for tariff increases to support the expansion of services and investments in 5G technology. The recent tariff hike led to a surge in customers switching to BSNL, the state-owned telecom provider.
According to media reports, the private telecom industry may reconsider the recent price hikes, subject to the government’s forthcoming decisions on the sector. The Cellular Operators Association of India (COAI), a trade association representing telecom operators, has urged the government to lower the licence fees imposed on the telecom operators.
The government currently levies the licence fee at 8% of the adjusted gross revenue (AGR) generated by telecom operators. The COAI is pushing for a revised licence fee structure that would reduce the rate to a range of 0.5% to 1% of total revenue. According to the COAI, a lower license fee would accelerate digital inclusion, particularly in remote regions, and make life easier for the common man.
The industry body’s suggestion comes on the heels of the Supreme Court’s decision to dismiss a review petition by telecom operators regarding corrections to the AGR calculation.
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According to SP Kochar, Director General of COAI, the continued imposition of high license fees is unjustified, especially since the original spectrum-related rationale has been eliminated. He suggests that the government adjust the fee to a level that reflects the actual administrative costs, rather than the current excessive rate. Additionally, telecom operators believe that if the government and the telecom regulator accept this demand, it could lead to significant benefits for the industry.
In July, BSNL saw a significant surge in customer acquisition, adding around 30 lakh new subscribers. However, Reliance Jio, Airtel, and Vodafone Idea experienced a decline in user base. The subscriber base of Vodafone Idea, Airtel, and Jio declined by 14 lakh, 17 lakh, and 8 lakh users, respectively, data from the Telecom Regulatory Authority of India (TRAI) showed.
According to reports, In August, BSNL’s customer base swelled by 25 lakh new users, even as Jio, Airtel, and Vodafone Idea lost 40 lakh, 24 lakh, and 19 lakh subscribers, respectively.
