Fixed-line telephony to be exempted from licence fee
BSNL will be the largest beneficiary of this move as it will save up to Rs 1,200 crore annually. Sizzling handsets
By TNN |
NEW DELHI: The government on Friday said that fixed-line telephony will be exempted from licence fee to encourage service providers, especially those in the private sector, to go to the rural areas. BSNL will be the largest beneficiary of this move as it will save up to Rs 1,200 crore annually. Private operators such as Airtel, Reliance and Tata have minimum presence in the landline space.
���I have already asked the Telecom Commission to deliberate on the issue to exempt fixed-line telephony from licence fee, charged as percentage of Adjusted Gross Revenue (AGR),��� telecom minister A Raja said at a function organised by the Cellular Operators Association of India (COAI). Currently, telecom operators pay 6-10% of their total revenues, including revenue from landline and braodband, towards licence fees.
Due to this announcement, state-run BSNL will be the biggest gainer as the state run PSU has over 90% market share in the fixed-line space. BSNL gets an annual revenue of about Rs 15,000 crore from its fixed-line operations and the PSU pays on an average, 8-9% of AGR as license fee to the government.
���I have already asked the Telecom Commission to deliberate on the issue to exempt fixed-line telephony from licence fee, charged as percentage of Adjusted Gross Revenue (AGR),��� telecom minister A Raja said at a function organised by the Cellular Operators Association of India (COAI). Currently, telecom operators pay 6-10% of their total revenues, including revenue from landline and braodband, towards licence fees.
Due to this announcement, state-run BSNL will be the biggest gainer as the state run PSU has over 90% market share in the fixed-line space. BSNL gets an annual revenue of about Rs 15,000 crore from its fixed-line operations and the PSU pays on an average, 8-9% of AGR as license fee to the government.
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However, private operators too welcomed the move: ���I am delighted. Fixed-line telephony must become recipient of funds and the operators should not be burdened with a host of levies like licence fee,������ Bharti Airtel chairman Sunil Mittal told reporters. So far, amongst private players, only Bharti Airtel, Reliance Communications and the Tatas have ventured in the fixed-line space.
Despite the fact that India boasts of a teledensity of nearly 25%, close to 70% of the population does not enjoy the fruits of the telecom revolution, Mr Raja said, and added, ���I call upon all the stakeholders (PSUs and private operators) to come forward and connect all the villages.���
For BSNL, the move will also help offset any losses that it may suffer on account of telecom regulator Trai���s recent move to do away with the access deficit charge levy. Until March-end, all telcos paid 0.75% of their total revenues towards ADC, which was used to support state-owned BSNL���s unviable fixed-line operations in rural India. The phasing out of ADC from April 1 onwards enables private operators to save about Rs 700 crore per annum.
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