Budget 2026: Telecom industry seeks license fee cut, GST relief
What's the story
India's leading telecom operators have called for major fiscal relief in the upcoming Union Budget for 2026-27. The Cellular Operators Association of India (COAI), which represents Reliance Jio, Bharti Airtel and Vodafone Idea (Vi), has proposed a drastic reduction in license fees to 0.5%-1% from the current effective levy of 3% of adjusted gross revenue (AGR). The move comes as heavy regulatory levies and tax outflows are seen as hindrances to funding 5G expansion and future network upgrades.
Financial relief
COAI's proposal aims to ease cash-flow pressures
S.P. Kochhar, Director General of COAI, said the proposed measures would be revenue neutral for the government while significantly easing cash-flow pressures on telecom companies. He stressed that lower statutory payouts would free up capital for network densification, faster 5G rollouts and investments in next-generation technologies aligned with India's digital ambitions.
Digital Bharat Nidhi
Calls for suspension of additional contributions
The COAI has also urged the government to suspend additional contributions to the Digital Bharat Nidhi until its existing unused corpus is fully deployed by the Department of Telecommunications (DoT). The association argues that continued collections are straining operator finances without proportional sectoral gains. This move is part of their broader budget wish list aimed at easing financial pressures on telecom operators.
Policy changes
GST reforms and spectrum pricing recalibration
The COAI has also called for GST reforms, especially on spectrum payments and regulatory levies. It has proposed exempting license fees, spectrum usage charges (SUC), and auctioned spectrum payments from GST or reducing the tax under the reverse charge mechanism to 5% from the current 18%. Beyond immediate tax relief, COAI has called for a broader recalibration of spectrum pricing and assignment frameworks.