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| Trai wants DoT to consult it on uniform licence fee |
| Press Trust of India / New Delhi Sep 06, 2009, 14:15 IST |
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The Telecom Regulatory Authority of India (Trai) today said the government must consult it before taking any decision on uniform licence fee of 8.5 per cent of annual revenues for operators as proposed by the Department of Telecom (DoT), because the issue has wide implications for the sector.
The DoT has decided that the existing variable licence fee structure for telecom operators should be replaced with a uniform rate. An internal note by the department suggests uniform licence fee should be 8.5 per cent for all types of services.
A senior Trai official told PTI that DoT should consult Trai on the issue of uniform licence fee as it has wide implications for the industry, stakeholders, subscribers and the government finances.
A senior DoT official said the proposed rate of 8.5 per cent will go to Telecom Commission's approval this month before it could be taken as final.
If the matter is referred to Trai, then DoT may insist on a time-bound response while Trai would like to do it in the usual consultation and recommendation process, which is time consuming.
The uniform licence fee is mooted as it would help avoid arbitrage over integrated operators allegedly loading up maximum revenues on licences with lower fee.
A change in the licence fee structure will have an adverse impact on long-distance operators and Internet service providers who pay only 6 per cent of their annual revenues as licence fee, said an analyst.
It will also have a negative impact on mobile operators offering services in C Circle states such as Assam, Bihar and Orissa as they are also paying only six per cent. An additional 2.5 percentage point outgo could weigh heavily on their toplines.
Mobile operators in metro regions and Circle A states will, however, gain since they currently pay 10 per cent licence fee.
For the government, this will have a positive impact as it plugs the loophole in the current system where the operators were giving wrong financial reports.
At present, operators pay between 6 per cent and 10 per cent of their annual revenue to the government as licence fee, depending on the type of service. This allows operators with multiple licences to take advantage of the differential fees and show higher revenues under the licence with lower revenue share.
The government has recently ordered a third party audit into accounts of all integrated telecom companies as some of the telecos were found under reporting revenues in segments attracting revenue share.
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