Telecom Commission permitted Imposition of Uniform Licence fee of 8.5 per cent

Telecom Commission, the apex decision-making body of the Department of Telecom in a meeting held on 22 July 2011 permitted imposition of a uniform licence fee of 8.5 per cent on all telecom operators.

Operators currently pay between 6 per cent and 10 per cent of their annual revenues as licence fee. Though the Telecom Regulatory Authority of India had recommended bringing down the licence fee to a uniform 6 per cent, a panel set up by the DoT pegged this at 8.5 per cent with an objective to protect Government income. The Telecom Commission overruled the TRAI suggestions and ratified the views of the DoT committee with regard to pegging license fee at 8.5%.

Telecom Commission’s move is expected to benefit operators in Metro areas which are currently paying 10 per cent of the annual revenues. However, Internet Service Providers and Long Distance Telephony operators would have to pay out more as they currently pay only 6 per cent. For pan-India players, the move will not have any major impact as they end up paying about 8.5 per cent of the overall revenues on an average.

The Commission also decided to take legal opinion on the issue of changing roll-out obligation for telecom players. TRAI had suggested roll out obligation based on population whereby operators would be required to cover all areas with more than 10000 people within two years. As per the current rules, operators are required to cover geographical area irrespective of the population. The DoT panel had rejected TRAI's views on grounds that most of the operators have already completed the current obligations and, therefore, it would be legally untenable to change the norms.

Other recommendations made by the DoT internal panel like TRAI demand powers to scrutinise spectrum usage by Government agencies such as the defence forces were agree to. The Commission also agreed with the DoT panel views that TRAI should only look at spectrum use by telecom operators.

The Commission ratified DoT panel's views that there was no need to set up a new fund to meet expenses related to spectrum re-farming. It accepted moving to a new licence regime whereby all licences will be unified and spectrum will be delinked from the licence.

The Commission decided that the TRAI should give detailed guidelines on moving to the new regime including implementing the first-come-first-served policy for giving out unified licences.