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Thomas K Thomas

New Delhi, Oct. 7 GSM-based mobile operators have approached the Government seeking permission to separate their non-voice revenues and club it under an Internet Service Provider’s licence.

The move is aimed at taking benefit of the differential revenue share for various types of telecom licences. While mobile operators at present pay between 6 per cent and 10 per cent of their annual revenues as licence fee, companies operating under an ISP licence do not pay anything to the Government. Since cellular operators also have an ISP licence, they will get a huge benefit if DoT allows them to segregate the revenue from data services.

The Cellular Operators’ Association of India, in a letter to the Department of Telecom, has pointed that some of the CDMA mobile players were already showing their non-voice revenues under ISP licence.

“We now understand that it might be permissible to separate the non-voice revenues and categorise and report them under an associate company whether it be an ISP or any other. We believe that this is being done by one of the larger CDMA service providers. We request clarification from the Department at the earliest so that we can advise our members to act suitably to safeguard their competitive position in the market,” the COAI said in its letter to DoT.

GSM operators referred to a report from UBS Investment Research according to which Reliance Communications reported revenues of Rs 3,160 crore to the telecom regulator in June 2008 but showed revenues of Rs 4,118 crore in its financial statements.

“The main reason for the discrepancy between RCom reported revenues and the TRAI reported revenues is that RCom reports all its non-voice revenues through one of its subsidiaries that has an ISP status. The revenue categories that are included in this are related to R-World, Content, Net Connect, Wireless terminals, rural direct exchange lines, SMS etc,” said the UBS report.

RCom officials said the company was complying with all the rules. They said that services such as R-World are based on a Web portal and, therefore, they were justified in showing the earnings as revenue from ISP licence.

Operators are increasingly using the differential revenue share to save on the licence fee. Integrated telecom players such as Bharti Airtel have found a smart way to save at least Rs 1,000 crore a year. While long distance telephony operators are required to pay only 6 per cent of the annual revenues mobile operators have to pay total levy of 12 per cent (including spectrum charges). Bharti is saving on the net outgo to the Government by loading higher revenue to its long distance licence.

More Stories on : Telecommunications | ISPs

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