The Telecom Regulatory Authority of India (Trai) has suggested increasing the license fee from the existing 6% to 8%. It will hep the government plug loss of revenues accruing to it from ISPs and BWA spectrum holders who have yet not rolled out services, despite obtaining the spectrum in 2010. Trai on Thursday suggested a new definition of revenue for Internet service providers (ISPs) on which the government should levy 8 percent annual fee, Reports, PTI.
ISP licenses must cover all kinds of revenue from Internet services, allowing for only deductions available for pass through charges and taxes/levies like in the case of access services, without any set-off for expenses.
The telecom department had sought the regulator's views separately for internet service providers, since non-finalisation of definition of AGR was delaying migration of existing ISP licensees to unified license regime.
When broadband players are already losing revenues to mobile operators, who are engaged in a huge data tariff war, so such step could further hurt their profitability in near future as well.
Trai had earlier recommended that the government should levy 8 percent licence fee from April 1, 2013 but there were some questions raised on revenue items that should be considered for calculating final charges.
Reliance Jio Infocomm, Airtel, Aircel, Tikona and Augere hold BWA spectrum in the 2010 auctions, only Bharti Airtel has so far rolled out 4G services and has bought out Qualcomm's BWA spectrum as well. The Reliance Jio is expected to roll out 4G services by September.