The Hindu Business Line : VSAT operators cry foul over TRAI order on AGR

Very small aperture terminal (VSAT) operators have expressed concern with the decision by the telecom regulator to include revenues from bundled hardware equipment as part of the adjusted gross revenue based on which the licence fee is calculated by the Government. The VSAT Operators Association of India is planning to approach the Telecom Regulatory Authority of India seeking a review on the matter.

The crux of the problem is that VSAT operators have to provide the equipment and hardware related to the services to their customers and, therefore, they will have to pay a licence fee on revenues earned from such sales even though the operators are directly not making money from hardware.

Licence fee

Operators pay between 6 per cent and 10 per cent of the AGR as the licence fee. If hardware sales are counted as AGR, VSAT operators will be liable to pay a higher licence fee.

"Unlike other telecom services where equipment required by the consumers such as handsets and telephone instruments can be bought off the shelf, in the case of VSAT services, we have to bundle the hardware like the dish antennae along with the service. We may be buying these equipment from a third party and yet we are required to include the sales in our annual revenues," said a VSAI official.

TRAI had announced its recommendations to include telecom equipment bundled with the services as part of the AGR.

While the recommendations will spell relief for a majority of telecom service providers, VSAT operators said that they have been left out from getting major gains from the order.

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