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Our Bureau

To result in Rs 500 crore gain for telecom operators

New Delhi , July 7

In a huge relief for telecom operators, the Telecom Dispute Settlement Appellate Tribunal (TDSAT) has ruled that the Government cannot collect licence fee from the operators on revenues earned from non-telecom activities.

According to industry estimates the telecom operators are expected to gain by at least Rs 500 crore as a result of this order to exclude non-telecom revenues from the calculations to arrive at the revenue share payable to the Government.

At present, operators pay between six and 10 per cent of their total annual revenues as licence fee to the Government. As per the Department of Telecom regulation, revenues earned by the operators from activities such as handset sales, interest earned from bank deposits, sale of assets and other corporate receipts are also included in the amount on which the revenue share is calculated. The telecom industry protested against the DoT policy and filed a petition with TDSAT.

The tribunal held that "we have no difficulty in accepting the argument of the petitioners that it can only be from the total gross revenue of the licensee company derived from the licensed activity only.

Even the use of the word `total revenue of the licensee company' read in isolation would not indicate that it would be the revenue from all sources including revenue from outside the licensed sources. Because, if that was the intention of the Government then there would have been addition of further words like `from all sources including unlicensed sources', which would have made it explicit."

The TDSAT further directed TRAI to determine the individual components of Adjusted Gross Revenue, after taking into consideration the material placed by DoT and the operators and submit its recommendations by October 1.

Huge Victory

Mr Ramji Srinivasan, the counsel for the operators, said it was a huge victory for the operators who were being unfairly asked by the Government to include revenues arising from non-licenced activities.

The TDSAT also came down heavily on the Government for having withheld from the TRAI, a report obtained by DoT from a private Chartered Accountant, that supposedly was the basis of the Government's decision to include revenues from non-telecom activities.

The TDSAT observed that DoT had not engaged in full and effective consultation with the TRAI and this had vitiated the entire proceedings. It noted that the TRAI itself had twice earlier held that revenues from non-licenced activities could not be charged from the operators.

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