TAIPA flays Trai's recommendation on tower cos

Industry body representing telecom tower companies TAIPA today demanded that Trai recommendations to bring infrastructure firms into the ambit of unified licence regime be kept in abeyance till DoT re-examines the matter throughly.

It also added that no policy decision should be "forced upon" existing participants.

The sectoral regulator Trai has recommended that telecom infrastructure providers be brought under the net of 'Unified Licence', which would mean that would they pay 8 per cent of revenue as annual licence fee.

At present, infrastructure players (IP-1), are only required to register with Department of Telecom (DoT) and do not have to pay a licence fee.

 

"... The issue must undergo a thorough re-examination by DoT alongwith industry stakeholders before any policy is issued. We would once again appeal for your personal intervention in rejecting these recommendations," Towers and Infrastructure Providers' Association (TAIPA) said in a letter to Telecom Secretary R Chandrashekhar.

In its recommendations, Trai estimates that bringing IP-1 under the licensing regime will fetch the government revenues of around Rs 1,900 crore per year.

However, Taipa dismissed these estimates as "completely unfounded and calculated without due application of mind and ignoring the ground realities."

The industry body said the tower industry is still struggling to recover its cost of capital after having invested over Rs 1 lakh crore and the infrastructure providers are "shocked" and "dismayed" with the stated recommendations.

"The proposed imposition of license fee will strongly hit the bottom line and would drive some IP-I providers out of business," it said.

Taipa further pointed if implemented, the recommendations would foreign direct investment in the sector from 100 per cent at present to 74 per cent, which is "detrimental to the growth of the infrastructure and would hinder/ discourage the investment in the sector."

Further, it suggested that IP-1 players should be given an option and not mandated for migration to the Unified Licensing regime.

"No policy decision should be made mandatory and forced upon existing participants.  In this case the regulator recommends cancellation of passive infrastructure IP-I players registration with the DOT and coercing them to convert to the proposed 'Unified Licence'," it said.