The Hindu Business Line : TRAI urges tax holiday for broadband sector

THE Telecom Regulatory Authority of India (TRAI), which is set to come out with its recommendations on broadband in the next couple of days, has suggested a tax holiday for the sector to increase Internet penetration in the country.

"We will tell the Government that some tax holiday should be given for players in the broadband sector for the spread of the Internet," Mr Pradip Baijal, Chairman, told newspersons on the sidelines of a communication infrastructure conference organised by the US Trade and Development Agency in association with the Federation of Indian Chambers of Commerce and Industry (FICCI).

Citing the example of the telecom sector, Mr Baijal said: "We have seen in the telecom sector that unless the tariffs are right, there is no growth. Even in broadband, we have to lower the entry barriers, both monetary and physical."

On whether the players would be allowed to ride on the last-mile copper network of BSNL, he said that he was in favour of the broadband players reaching households by using it.

India currently has a very low broadband penetration of two per 10,000 persons.

On the growth of mobile telephone services, TRAI has said that it would soon come out with more recommendations to the Government on removing constraints that are acting as barriers to growth in mobile penetration.

"We expect 100 million mobile connections by December 2005 and 70 million phones by March 2005, taking the teledensity to 15 per cent. To achieve such growth we need to have a litigation-free sector and intense competition."

Mr Baijal was also confident that India could achieve the level of 100 million connections.

He pointed out that 62 million Indians were automobile owners and the purchasing power for an automobile was quite high in comparison to a mobile connection.

According to him, national roaming must be made compulsory for all operators since all bottlenecks to the growth of telecom need to be removed.

Mr Baijal, however, clarified that a final decision on making roaming compulsory would be taken after due consultations.

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