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Our Bureau

New Delhi , Aug. 6

THE Telecom Regulatory Authority of India (TRAI), on Friday, proposed an across-the-board reduction in the annual licence fee from a high of 15 per cent to 6 per cent, even as it recommended an entry fee of Rs 180 crore for an all-India unified licence that will enable a new operator to roll-out any communication service, except cellular.

An additional charge would be levied on those who wish to provide cellular services which will be equivalent to what the existing operators paid.

In a draft recommendation on unified licence, the regulator has also proposed to include broadcasting services and unrestricted Internet telephony within the gamut of unified licence which will allow integrated players like Bharti and Reliance to foray into these segments at no extra cost.

It has also suggested the creation of a new category of operators called `niche operators' who will offer fixed line telephone services in rural districts where the tele-density is less than one per cent. TRAI has also said that non-telecom revenues like sale of handsets should be kept out of the operator's revenues used to calculate the annual licence fee. The regulator has proposed to ease out the entry fee to Rs 30 lakh over the next five years.

The recommendation on licence fee, if accepted, would mean tremendous costs benefit to the operators which, in turn, would result in tariff cuts for consumers.

``The measures proposed by TRAI is aimed at bringing down the cost of operators, creating a level-playing field between various segments and at the same time, not leaving any category of operator at a worse off situation," said a TRAI official.

As per the proposal, TRAI has introduced three categories of licensing in the new regime. The first category called `licensing through authorisation' will include radio paging services, Internet services, mobile radio trunking services and infrastructure services.

Operators offering these services will not be charged any entry fee for migrating into the new unified regime. The licence fee has 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 like Gas Authority of India and RailTel.

The second category of services called `class licence' include VSAT (very small aperture terminal) and niche operators. TRAI has suggested automatic migration for this category of operators to the new regime and 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 who want to take this licence will have to shell out Rs 107 crore for offering long distance services and an additional fee for offering access service depending on the circle.

For instance, if Spice Telecom, which is an operator in Punjab wants to offer mobile services in Delhi also, it will have to pay Rs 8 crore in addition to the spectrum charge. TRAI has fixed an entry fee for each circle ranging from Rs 32 lakh to Rs 5.2 crore.

While operators can chose not to migrate to the new regime, they will get the benefit of the reduced annual licence fee. Cellular operators migrating to the new regime will pay 6 per cent of revenue instead of 10 per cent at present. The Cellular Operators' Association of India, however, termed the recommendations as "disappointing" since cellular operators will have to fork out Rs 107 crore for offering long distance service.

"The roll-out obligations have not been eased out for cellular operators and the entry fee for inter circle connectivity is very steep. It does not change anything for cellular operators as we could have paid Rs 100 crore in the earlier regime and taken an NLD licence," said Mr T.V. Ramachandran, Director General, COAI.

There is also not much for Internet service providers who will also have to cough up Rs 107 crore for offering unrestricted Internet telephony. Mr Amitabh Singhal, Secretary, Internet Service Providers Association, said, "It does not make sense to open up Internet telephony and ask us to pay an entry fee paid by an NLD operator." At present, ISPs are allowed to offer the service for international calls only.

However, long-distance operators have something to cheer about as their roll-out obligations have been eased out. TRAI has also made ample provisions to protect the investments made by large players by putting a steep entry fee.

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. Bharti, for instance which has already paid about Rs 15 crore will have to pay Rs 92 crore to migrate to the new regime. Licence fee for NLD operators has been proposed to be brought down from 15 per cent to 6 per cent.

More Stories on : Regulatory Bodies & Rulings | Telecommunications

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