Debt-burdened telecom companies have appealed to the government for relief. The companies have demanded to increase the lease of spectrum as well as increase the moratorium period on installments and reduce the license fee.
Under the burden of AGR, the telecom companies have demanded an immediate relief package from the government. COAI, an organization of telecom companies, has written a letter to the government demanding relief on tax to the companies.
According to COAI, the government should first increase the spectrum lease of telecom companies from 20 years to 40 years. Second, the moratorium on spectrum installments should be increased from 2 years to 7 to 10 years. Companies currently pay an interest of 9 to 10 percent on spectrum installments, the demand of companies is that this should also be reduced to five to 6 percent. Right now the license fee is 8%. COAI demands that it should be reduced to 2%. Companies currently pay 3 to 6 percent as spectrum usage charges.
According to telecom companies, they have to pay 32 percent of their income to the government in the form of taxes and levies. Experts say that if the government reduces the tax on the industry, then it will increase the confidence of investors in the telecom sector and more investment will come in the sector.
Telecom companies have also sought relief on financial and performance bank guarantees. If the government cuts the license fee by 2 percent, then the telecom companies get a benefit of Rs 3000 crore. Overall, the relief package from the government can help the telecom companies get back on track.
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