Cellular Operator Association of India (COAI) has asked the government for some effective measures to improve the financial health of the telecom sector.

In a letter to the Telecom Secretary, Anshu Prakash, some of the measures sought by the Director General, COAI, SP Kochhar include reduction in taxes and levies, increased tenure of existing and future spectrum holdings and providing a 7-10 year moratorium for both present and future payments, reasonable reserve prices and easier payment terms, reduction in interest rate for deferred payment liability and review of adjusted gross revenue (AGR) definition.

According to COAI, reasonable reserve prices, easier payment terms in the form of doubling the tenure of all auctioned spectrum holdings both existing and future from 20 years to 40 years, without any additional amounts. COAI has also suggested for reduction of Licence Fee (LF) from three per cent to one per cent of AGR for all operators to cover the administrative and regulatory costs in line with the international norms. Reduce the interest rate on deferred spectrum payment liabilities to four per cent for all current and future payments including AGR payments. Implement a progressive AGR definition to include only telecom revenue and redefine deductions, Kochhar said.

Other suggestions include lowering cumulative regulatory taxes and levies burden by reducing License Fee, Universal Service Obligation (USO) levy, and Spectrum Usage Charges (SUC) to cover the administrative and regulatory cost.