Essar Seeks Quarterly Instalments For Licence Fee Payment

As per the guidelines of the tender prescribing norms on private entry into basic telecom services, companies are required to pay their yearly licence fee tranches upfront. Essar Commvision is learnt to have made this request at a recent meeting between the Essar group chairman, Shashi Ruia, and former communications secretary M P Modi. However, DoT has not yet taken a decision on the request.

The company had quoted Rs 4,599 crore as licence fees to be paid over a period of 15 years to procure the licence for operating basic telecom services in Punjab. The first-year instalment of licence fees works out to Rs 131.40 crore and a quarterly payment schedule would result in four payouts of Rs 32.85 crore each.

 

In case DoT allows basic telecom companies to pay licence fee payments in quarterly instalments, it will ease the financial burden of upfront licence fee payments yearly. Raising yearly licence fee tranches upfront every year will considerably increase the interest burden on the operating companies, a telecom official said.

Though, at the end of the year, the total licence payments will be the same regardless of whether the payments are annual or quarterly, companies will not have the problem of mobilising large tranches at one go every year, he added.