The Hindu Business Line : Govt cuts licence fee for telcos completing roll out

NEW DELHI: The Government has reduced the licence fee for the telecom service providers which have completed over 95 per cent network roll-out in a service area, except metros, a move aimed at encouraging operators to increase tele-density.

If the percentage coverage of total number of development blocks in a service area is covered by the licensee is over 95 per cent, the applicable universal service obligation levy will be three per cent instead of five per cent, which means the licence f ee is automatically reduced for category A, B and C circles to 8 per cent 6 per cent and 4 per cent respectively, DoT said while amending the UASL licence.

The benefit is, however, not applicable to coverage of metros. A DoT official said the move is aimed at encouraging operators to go beyond metros and fulfil the licence conditions for network roll-out to increase tele-density.

Annual licence fee which operators pay to the government on a revenue share basis includes five per cent of USO levy. Bharti Airtel, Reliance Communications and BSNL which have country-wide presence will be able to benefit from this.

The new rates will be applicable from April, 2009. The USOF contribution has been reduced to a flat 3 per cent for those players whose services are available in over 95 per cent of the residential areas.

However, the licence fee cuts will not be applicable in the four metros where they will continue to pay 10 per cent of their gross revenues to the government. The DoT has also clarified that a telecom co only has to have “identifiable physical infrastr ucture” in a given area to be considered as having a presence there.

“Verification of coverage of each development block shall be based on verification of installation of identifiable physical infrastructure of the licensee for providing telecom access services,” said the DoT communication to all telcos. - PTI

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