The Indian Paging Service Association is planning to take the government to court against the "relief" package announced by the Union Cabinet on grounds of it being "unfair".
The association has said the package only benefits defunct paging operators who used to operate in a circle, whereas the six operators currently offering paging services at the city level have been left in the lurch.
According to IPSA sources, "The so-called package bails out only paging operators at the circle level. There was only one company that had the licence for offering paging at this level. Despite the fact that this company has shut operations a year ago, the government has unfairly chosen to bail it out, whereas the real relief package should have been for the existing city level operators."
BPL was offering circle level paging services. Other operators like Mobilink, Pagelink and Modipage have licences for operating in cities but are lost in the brouhaha over cellular and limited mobility services.
According to the association, 80-90 per cent of the Rs 450-crore (Rs 4.5-billion) bailout package announced by the Cabinet on Friday will go to circle level operators.
IPSA sources said while it had no problems with circle operators getting relief, the government should have extended the same benefits to city operators as well.
While circle operators earlier had to pay a licence fee for 10 years, the bailout package now allows them to pay 5 per cent of the annual revenue after the first year of operations, thereby knocking nine years off the licence fee.
However, for city players, the licence fee was for a period of three years and the relief package has knocked off only one year.
"The six city operators still have to pay licence fees for the first two years of operations. This is unfair because even the cellular operators' migration package had allowed them to pay a revenue share after the first year of operations," IPSA sources said.
Even the Tariff Commission had recommended giving relief to the city paging companies, they added.
IPSA sources said the association would first take up the matter with the government and then, if required, go to court.
"There is still a market for paging services but no one will invest anew if the past issues are not resolved. As compared to a minimum of Rs 500 a month required for cell usage, paging comes for Rs 100 a month," said an executive of a paging company.
Meanwhile, the paging subscriber base has touched a low of 400,000 from 1.5 million a few years ago.
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