Government cuts licence fee for telcos completing roll-out

Mumbai: The government has reduced the licence fee for telecom service providers, including Reliance Communications, Bharti Airtel and BSNL, which have country-wide presence and have completed over 95 per cent network roll-out in a service area, except metros.

If the percentage coverage of total number of development blocks in a service area by the licensee is over 95 per cent, the applicable universal service obligation levy will be three per cent, instead of five per cent. This will automatically reduce the licence fee 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 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 new rates will be applicable from April 2009.

The move is aimed at encouraging operators to increase tele-density in the country and the benefit will not be applicable to metro areas.

Rather, the move aims at encouraging operators to go beyond metros and fulful 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 universal service obligation levy.

For obtaining the concessiosn, DoT said, a telco has to have ''identifiable physical infrastructure'' 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.