The Cellular Operators Association of India (COAI) has written to the telecom department requesting for an immediate reduction in the Universal Service Obligation Fund (USOF) levy to three per cent. Further, COAI said that the levy should be eventually done away with in the next 2-3 years in line with the Telecom Regulatory Authority of India’s (TRAI) recommendations.

Moreover, COAI has requested the Department of Telecommunications (DoT) to reduce the remaining licence fee from three per cent to one per cent of the adjusted gross revenue. This will bring the total licence fee to four per cent from the present eight per cent, COAI stated.

Presently, the USOF levy stands at five per cent while the licence fee is three per cent. The COAI said that these regulatory levies were additional costs to consumers and a reduction in these levies would act as an incentive for operators to roll out network in rural areas.

As per COAI, collections from the USOF between FY2003 and FY2019 amounts to Rs 996.74 billion. However, Rs 505.54 billion remains unutilised as on June 2019. COAI opines that this amount is greater than the amount required for the project to connect 43,000 unconnected villages.