Mobile players seek exemption on wireless Net

Telecom operators, including Reliance Infotel, Bharti Airtel and Vodafone, have opposed the proposal to impose licence fee on Internet services.

Telecom companies have told the telecom regulator that Internet penetration in the country is still very low and, therefore, imposing a fee would be detrimental to the cause of reaching broadband to the masses.

Govt’s proposal

The Government has proposed to collect a percentage of the revenue from Internet services towards licence fee as part of the to-be-launched unified licence regime. Under this proposal, Internet service providers may have to pay 6 per cent of their annual revenues compared to nothing at present.

Mukesh Ambani-backed Reliance Infotel said that charging licence fee on pure Internet services may prove to be counter-productive since all such charges will ultimately be paid by end subscriber who may not opt for services if they become costly.

“The Government of India as sovereign has called for tenders for auction of broadband spectrum with a clear understanding that there will not be any licence fee on pure Internet services and only spectrum usage charges at the rate of one per cent will be recovered from the successful bidders. Changing the same at this stage will give a wrong signal to world,” Reliance Infotel said in its submission to the TRAI.

Pure Internet

At present, companies that hold Internet Service Providers licence have been allowed to deduct revenues from pure Internet services while calculating the licence fee payable to the Government. Pure Internet means providing Internet access and Internet content.

However, Internet services provided by mobile players via 3G and 4G technologies come under the purview of licence fee. Mobile operators, including Airtel, have told the TRAI that this discrepancy should be removed to level the playing field with broadband operators such as Reliance Infotel.

Key driver

“Mobile / wireless Internet access is a key driver of change in the economy. However, the Internet access provided under a unified access licence is subjected to a revenue share of 11-16 per cent. Therefore, to provide an impetus to the growth of Internet / broadband, the revenue from pure Internet service should be excluded for cellular operators also,” Airtel said.

Vodafone India, while supporting the demand for exempting Internet services from the scope of licence fee, said that Internet players should not be allowed to offer voice services.

“We categorically oppose any direct or indirect steps to allow the Internet service providers (ISPs) to offer Voice Over IP as the same has the issues of non-level playing field and the revenue loss to the Government irrespective of some ISPs having broadband spectrum.”

“The present scope of service in respective categories of licences is sacrosanct and the level playing field is to be maintained only between same category and similarly positioned licensees,” Vodafone added.

(This article was published on February 5, 2013)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.