Telecom fix: Ravi Shankar Prasad seeks cut in licence fee, refund Rs 30, 000 cr of stuck GST

Telecom and IT minister Ravi Shankar Prasad has batted for a slew of reforms in the telecom sector which will provide a relief of around Rs 3,000 crore annually to the financially stressed operators by way of revenue share licence fee payment.

In a letter to finance minister Nirmala Sitharaman outlining his Budget proposals for the sector, Prasad has urged for reduction in licence fees by a fourth. Currently, operators pay 8% of their adjusted gross revenue as licence fee. Of this, 5% goes to the universal service obligation fund which is for rural telephony and 3% to the government exchequer. Prasad has proposed that the USOF levy be cut by 2 percentage points to 3% since rural teledensity has increased significantly since 2003 when the fund was set up. If done, operators would pay a licence fee of 6% of their AGR against 8% currently.