COAI Submits Key Recommendations for Union Budget 2026–27 to Ease Telecom Sector Burden

The Cellular Operators Association of India (COAI), representing the country’s leading telecom operators, has urged the Government to adopt vital financial reforms in the upcoming Union Budget 2026–27 to ensure sustainable sector growth and accelerate India’s digital ambitions.

Highlighting the telecom industry’s pivotal role as the backbone of Digital India and a catalyst for next-generation connectivity, Lt. Gen. Dr. S.P. Kochhar, Director General, COAI said the sector continues to grapple with a heavy levy framework and escalating operational costs. Addressing these challenges, it noted, will be critical to achieving the vision of a Viksit Bharat powered by robust and future-ready digital infrastructure.

Reduction in Regulatory Levies

COAI has called for rationalisation of statutory levies to improve operator viability and enable greater investments in network rollout.

• The industry has sought a reduction in the License Fee component, currently comprising a 3% license charge and 5% Digital Bharat Nidhi (DBN) levy on Adjusted Gross Revenue (AGR). COAI has recommended bringing the license portion down to 0.5%–1%, strictly to cover administrative costs.
• The body has further urged that Digital Bharat Nidhi contributions be temporarily halted until the currently unutilised DBN corpus is fully deployed by the Department of Telecommunications.

GST Policy Rationalisation

To ease liquidity challenges and help operators unlock trapped capital, COAI has submitted three key GST reforms:
a) GST exemption on regulatory payments such as License Fee, Spectrum Usage Charges (SUC) and auction-related spectrum dues.
b) Reduction of GST under Reverse Charge from 18% to 5% on spectrum, LF and SUC — a move that COAI notes is revenue-neutral for the government while immediately alleviating cash pressure on operators.
c) Permission to use accumulated Input Tax Credit (ITC) to discharge GST liabilities payable under Reverse Charge Mechanism, minimising cash outflow and reducing idle credit stock.

Spectrum Pricing Reform Needed

COAI reiterated that telecom is no longer a standalone sector, but a horizontal enabler underpinning every other industry — from manufacturing and education to healthcare and financial services. Against this backdrop, the association said a recalibration of spectrum pricing and assignment policy is essential to maximise long-term national economic impact.

“India’s digital revolution needs a financially resilient telecom industry,” COAI emphasized, adding that a supportive fiscal framework in Budget 2026–27 will strengthen the nation’s path to next-generation 5G, 5G Advanced and future 6G connectivity.