The Department of Telecommunications (DoT) is not willing to accept the Telecom Regulatory Authority of India (Trai) recommendations on lowering the licence fee of telcos from 8 per cent to 6, according to sources in know of the development.

However, according to sources, the DoT may consider to lower the component of universal service obligation fund (USOF) to 3 per cent from 5 per cent of revenue. The possibilities for USOF component to be reduced has increased as the funds collected by the telecom operators have been lying idle for quite some time now, as stated by an official.

Close to Rs 50,000 crore is lying idle in that (USOF). Most of it is used for improving services in the rural areas, which have either stopped or are going slow for one reason or other as stated by an official.

In 2015, the telecom regulator in its recommendations suggested lowering the license fee of telcos to 6 per cent from the current 8 per cent and suggested changing the definition of adjusted gross revenue (AGR).

Further, TRAI also stated that income from non-telecom sources should not be considered to define AGR of telcos.

However, the definition of AGR might not be changed by the DoT as demanded by the telcos after the Supreme Court verdict, as stated by another official.

In June, the Cellular Operators Association of India director general Rajan Mathews had said that the DoT should revise the definition of AGR for all future purposes to avoid any further burden on the sector.

Supreme Court verdict has now settled the definition of AGR that has been the biggest bone of contention between regulators and telcos. In India, all telecom companies pay a part of their revenues as licence fee and spectrum charges to the DoT for using the spectrum owned by the Centre.

In its definition of AGR, the DoT had said that Telcos must cover all the revenue earned by them, including from non-telecom sources such as deposit interests and sale of assets. The telcos were opposed to this and had challenged this definition in several forums, including the Supreme Court.

The DoT’s definition of AGR had been upheld by the apex court in its October 24 judgement, last year. It said that since the licensee had agreed to the migration packages, they were liable to pay the dues, the penalty on dues, and the interest on penalty due to delay in payments. This month, telcos has been asked to pay the AGR dues in the next ten years by the top court.

These yearly instalments will have to be made by March 31 of every succeeding financial year and a compliance report by the companies as well as the DoT has to be filed by April 7 of that year; the ruling by a three-judge Bench headed by Justice Arun Mishra stated in its judgment, bringing a close to the nearly 20-year old issue.