Terming Trai's proposal to bring telecom infrastructure providers under the proposed unified licence regime as "arbitrary" and "retrograde", tower industry body TAIPA today said the move would strongly hit the bottom line and drive some players out of business.
Trai has recommended that telecom infrastructure providers be brought under the net of 'Unified Licence', which would mean that would they pay 8% of revenue as licence fee.
Also, they will have to abide by the 74% FDI limit as is applicable on telecom operators at present.
"The tower industry/infrastructure providers are shocked and dismayed...These recommendations are arbitrary, unjustified, retrograde and indefensible, besides forcing the established infrastructure policy to take a 'U-turn'," TAIPA said in a statement.
It added that the recommendations must be set aside till Department of Telecommunications (DoT) comes out with a detailed examination of this matter.
Towers and Infrastructure Providers' Association (TAIPA) said the tower industry is still struggling to recover its cost of capital after having invested over Rs one lakh crore.
"The imposition of license fee will strongly hit the bottom line, and would drive some IP-I providers out of business," it said.
TAIPA alleged that the regulator had overlooked numerous representations made by the industry at various forums and "seems to be in break-neck hurry to finish the task".
"The telecom industry is going through a very challenging phase and changing the rules of business midway will irreparably damage the growth prospects of the sector," TAIPA Director General Umang Das said.
TAIPA said every element of the revenue received from telecom operators by IP-1 players is already license fee paid and any imposition of license fee will amount to payment of double-license fee.
Talking about FDI cap, TAIPA said the move will cut down the much needed investment into the sector.
"This goes completely against the FDI policy of the country, announced last month by DIPP where, the existing 100% investment has been retained. Thus, 100% FDI must be retained for infrastructure players," TAIPA claimed.