In move that could lower telecom tariffs further, the Telecom Regulatory Authority of India on Thursday recommended a reduction in revenue share from 15 per cent of the adjusted gross revenue to 6 per cent under the unified licensing regime.
In its recommendations on unified licensing to the department of telecommunications, the regulator also mandated a shift to the new regime after five years, though it will be optional for the time being. After two years, no new service-specific licence will be issued.
Tata Tele, Bharti and Reliance Infocomm already have unified access licences.
Once the unified licensing regime is in place, a licence-holder will be able provide access, long-distance telephony, Internet and broadcast services through a single wire or wireless medium. A unified licence holder will be required to pay 6 per cent licence fees.
The registration fee under the unified licensing regime has been fixed at Rs 107 crore (Rs 1.07 billion), in addition to a charge based on the entry fee paid by the new basic service operators. This will be gradually brought down to Rs 30 lakh (Rs 3 million) over five years from the date of the implementation of the new regime.
In the meantime, the regulator has suggested that access providers, who do not wish to offer long-distance services, can enter a new circle for two years after paying 16 per cent of the fixed fee paid by basic service operators in 2001.
This would mean that an operator can offer services in Delhi after paying Rs 8 crore (Rs 80 million) or in Mumbai after a payment of Rs 5.3 crore (Rs 53 million).
In a relief to companies like Bharti, which had received a 2 per cent concession on licences fee for two years, the regulator has proposed a licence fee of 5 per cent for six years.
Also, operators like the Tatas, which are in the access business through Tata Tele and in the long-distance business through VSNL, would not be required to pay licence fee under the unified licensing regime. According to the regulator, a company, which holds 10 per cent or more equity in another company, did not need a new licence.
Class licences for V-SAT and niche operators has also been proposed with the licence fee of 6 per cent of AGR and minus registration fees.
The niche operators can provide fixed telecom services, including multimedia, Internet telephony and other Internet Protocol-enabled services in areas with less than one per cent teledensity. The details, including the possibility of waiving spectrum charges, are to be decided in due course.
The regulator has also provided for licences through authorisation, which would not attract any registration or licence fee. Services like radio paging, Internet and limited Internet telephony can be provided under this segment.
In case a unified licencee wants to offer "broadcasting service", the licencee would have to apply to the information and broadcasting ministry. A standalone licence for broadcasting services, too, would continue to be issued under the prevailing process by the ministry.
Cellular Operators' Association of India Director General TV Ramachandran said the move to lower licence fees was expected to result in lower tariffs in the coming years.
He also said that in the new regime more players were expected to enter the international and domestic long-distance business, which would further help in lowering tariffs in these segments.
He, however, said there may not be too many takers for the niche operator licences. "The concept lacks practicality," Ramachandran said.
Bharti executives added India had one of the highest taxed telecom industry in the world and the lower licence fee was a step in the right direction.
"Instead of proposing niche operators, the government and the regulator should provide incentives to the existing players to enter rural and remote areas," an executive said.
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