TRAI pegs unified licence fee at Rs 180 cr

By siliconindia staff writer   |   Friday, 14 January 2005, 20:30 IST
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NEW DELHI: The Telecom Regulatory Authority of India (TRAI) has made no significant changes to the proposals made in its draft recommendations on unified licence regime despite various representations from the industry and has reiterated an across the board reduction in the annual licence fee from a high of 15 per cent to 6 per cent. The TRAI has also proposed an entry fee of Rs 180 crore for an all India unified licence that will enable a new operator to roll out any communication and broadcasting services, except cellular. An additional charge would be levied on those wanting to provide cellular services, which will be equivalent to what the existing operators paid. The regulator has, however, suggested that operators with unified access licence will have the option to remain in the existing regime for another two years. This will enable smaller operators such as Shyam Telecom to pick up licences for various circles if they do not wish to cough up Rs 107 crore for the long distance licence. The regulator has also proposed that companies with common promoter having a minimum of 10 per cent equity in each of the subsidiaries to migrate into the new regime as a single entity. The TRAI has introduced three categories of licencing in the new regime. The first category called "Licencing through authorisation' will include radio paging services, Internet services, mobile radio trunking services and infrastructure services. There will not be any entry fee for this category and the licence fee have also been completely waived off from an average of 6 per cent of the annual revenue, at present. The move will benefit dying paging companies and infrastructure providers such as Gas Authority of India and RailTel. The second category of services called `Class Licence' include VSAT (very small aperture terminal) and niche operators who will get automatic migration to the new regime with an annual licence fee of 6 per cent of the revenues. The move will benefit VSAT companies such as Hughes, Comsat Max and HCL Comnet, which are paying a licence fee of 10 per cent of the annual revenues. The third and the most significant category called `Unified Licence' will include all telecom services. Operators wanting to take this licence will have to shell out Rs 107 crore for offering long distance services and an additional fee, determined by TRAI, for offering access service depending on the circle. For instance, if Himachal Futuristics Communications Ltd, which is an operator in Punjab, wants to offer basic services in Delhi, it will have to pay Rs 8 crore. The recommendation allows integrated players such as Bharti and Reliance to foray into segments such asbroadcasting and Internet telephony at no extra cost. It has also suggested the creation of a new category of operators called `niche operators' which will offer fixed line telephone services in rural districts where the tele-density is less than 1 per cent. The TRAI has also said that non-telecom revenues such as sale of handsets should be kept out of the operator's revenues used to calculate the annual licence fee. The Cellular Operators Association of India was disappointed with the recommendations since cellular operators will have to fork out Rs 107 crore for offering long distance service. There is also not much for Internet service providers who will also have to cough up the same amount for offering unrestricted Internet telephony. However, long distance operators have something to cheer about as their roll out obligations have been eased out. Existing long distance operators will have to pay the difference between the licence fee already paid in the last two years and Rs 107 crore.