DoT may not give in to industry demand on licence fee cut

DoT may not give in to industry demand on licence fee cut

New Delhi: The government may not accede to the demand of pan-India telecom players and immediately cut the annual licence fee varying between 6-10%.

At a recent meeting telecom minister A Raja held with CEOs of the telcos, operators demanded a reduction in the annual licence fee for companies covering the whole country.

But the DoT gave no assurance, sources in the know said.

There is no intention to do so either, said an official. A cut in licence fee would need approval of the finance ministry and mean revenue outgo to the exchequer, the official said.

However, an industry official who attented the meeting said DoT was quite favourable to cut 2% in licence fee for those operators who have covered 90% of the country and there was some procedural delay in doing so.

DoT is waiting for the TRAI recommendations on a uniform licence fee. Internally, DoT has decided that it should be 8.5% for all service areas and all types of services.

DoT’s decision on uniform licence fee would, however, cannot be termed as licence fee cut as it is a realignment of several rates into one, said the DoT official, adding it would check loss of revenue arising out of arbitrage opportunities made by telcos.