Tower firms get relief from paying licence fee

Giving a breather to telecom tower companies, the Department of Telecommunications (DoT) is understood to have kept in abeyance the proposal to bring telecom infrastructure providers under the uniform annual licence fee regime.

This means tower companies such as GTL Infrastructure, Indus Towers and American Tower Corp (ATC) will not have to pay any licence fee on their income (accruing from the telecom operators for the use of their infrastructure) till further guidelines from the government on this matter.

Infrastructure providers do not pay any licence fee to DoT. Under the new regulations, it was proposed to bring all of them under a uniform licence fee regime, starting July 2012. Under the regime, by April 1, 2013, all licencees would be required to pay eight per cent of their adjusted gross revenues as annual fees.

Mobile operators use the passive infrastructure such as tower, building and antenna provided by infrastructure providers, who are registered with DoT.

DoT had already issued notifications for bringing the unified service access licence providers, internet service providers, national long distance licences and international long distance licences under the uniform annual licence fee regime structure from this month.

However, the decision on telecom tower companies is yet to be firmed up. When queried, a DoT official said: "The matter is still under consideration."

However, Umang Das, director general of the Tower and Infrastructure Providers Association (Taipa), said: “We were told the government has decided to keep the matter in abeyance, which is a good development.”

Taipa has been opposing the move, saying if they are brought under the licence regime, then that will fold up the tower industry.

However, in case the government imposes the licence fee, it would have meant an additional revenue of Rs 1,400 crore annually for the government. Most tower companies had made it clear that they would have no option but to pass on the costs of the licence fee to the operators in increased rentals.