The Hindu Business Line : Fixed line phone tariffs likely to come down

New Delhi, April 25 The Communication and IT Minister, Mr A. Raja, on Friday announced that operators will be exempted from paying licence fee based on revenues earned from fixed line telephone service.

The move is expected to bring down fixed line telephone tariffs making them more competitive against mobile phones. Operators including Bharat Sanchar Nigam Ltd, Mahanagar Telephone Nigam Ltd, Bharti Airtel, Tata Teleservices and Reliance Communications pay between 6 per cent and 10 per cent of their annual revenues from 39.4 million fixed line subscribers in the country to the Government.

The biggest gainer will be BSNL which has 31.5 million fixed line subscribers. The PSU will stand to gain Rs 1,200 crore a year once the licence fee is removed. MTNL and Bharti Airtel, with 3.6 million and 2.2 million fixed line users respectively, will gain about Rs 200 crore each.

Announcing the initiative at a seminar organised by the GSM industry, Mr Raja said that in order to boost penetration and spread of fixed line services, BSNL and private operators will be exempted from Adjusted Gross Revenue (AGR) in the next couple of months.

Commenting on the announcement Mr S.C. Khanna, Secretary-General, Association of Unified Telecom Service Providers of India, said, “We welcome this decision as this will arrest the slump in fixed line telephone subscriber base. It will also enable faster roll out of broadband services.”

Fixed line telephone subscriber base has been declining as customers find mobile services cheaper and convenient. About 7 million subscribers have given up their fixed line telephones over the past five years.

Operators said that if the licence fee is removed then they will be able to pass on the benefit to customers making fixed line services more affordable.

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