Fixed line telephony to be exempt from license fee: Raja

Fixed line telephony to be exempt from license fee: Raja


New Delhi: The government said on 25 April fixed line telephony will be exempted from the license fee to encourage service providers especially in the private sector to go to rural areas.

“I have already asked the Telecom Commission to deliberate on the issue to exempt fixed line telephony from license fee, charged as percentage of Adjusted Gross Revenue (AGR)," Telecom Minister A Raja said at a function organised by Cellular Operators Association of India (COAI).

Despite a teledensity of nearly 25%, around 70% of the population does not enjoy the fruits of telecom revolution, he said adding, “I call upon all the stakeholders (PSUs and private operators) to come forward and connect all the villages."

On behalf of the government, “I assure you all the help to go to rural areas."

State-run BSNL would be the single largest beneficiary of Raja’s announcement as the PSU was having nearly 90% of the fixed line telephone connections but India’s largest private operator Bharti Airtel welcomed the decision saying “fixed line telephony needs encouragement and it should not be burdened by taxes."

Commenting on the decision, Sunil Mittal of Bharti Airtel told reporters, “I am delighted. Fixed line telephony must become recipient of funds and the operators should not be burdened with a host of levies like license fee of contribution to the Universal Service Obligation (USO) Fund."

With a view to give further impetus to rural telephony, Raja said beginning of next generation 3G mobile services would provide much required help as this has a potential of a far higher voice capacity as well as high speed data communication compared to existing 2G services.

For urban India 3G would offer the convenience of mobility with the rich multimedia of the Internet but “it is in rural India that I hope to see 3G making an invaluable contribution.

“The higher voice capacity of 3G spectrum will also make it possible to offer far more affordable voice services, which will encourage more rural users to take up services," the minister said.

On the allocation of 3G spectrum, Raja said the Department of Telecom (DoT) has sent back the recommendations to telecom regulator TRAI for some clarifications and as soon as they come back, the government would come out with guidelines.