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Trai rings lower bills

09-August-2004
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Trai rings lower bills

The Telecom Regulation Authority of India’s (Trai) recommendations on unified licensing, if implemented, could translate into cost benefit of up to 10 per cent to the end-consumer on air-time charges and monthly rentals.

“The reduction of licence fee to 6 per cent, network resources optimisation and total freedom to offer all telecom services could translate into cost reductions of 5-10 per cent to the consumers,” a Trai official said.

Network resources optimisation implies that any telecom service provider can use its network, say, optical fibre cable to offer any telecom service. The use of network for providing other telecom services, apart from the licensed ones, was not allowed earlier.

“This will give operators the flexibility to use the network to the optimal level to offer any telecom service,” the official said.

According to Cellular Operators Association of India (COAI) president TV Ramachandaran, reduction of cellular tariffs was likely once Trai’s recommendations are accepted.

A Bharti spokesperson said it was too early to comment on the implications of the recommendations. Officials at Hutch were unavailable for comment.

“We were expecting the Trai recommendations to include direct inter-circle connectivity and continuation of 2 per cent relief to first and second cellular operators in the circle ‘C’ ,” Mr Ramachandaran said.

Trai sources said the 2 per cent relief on licence fee, valid for the first and second cellular operators in the category ‘C’ circles, is likely to continue.

“Earlier, a relief of 2 per cent was given to the first and second cellular operators operating in the ‘C’ category circles”.

“We are planning to send our comments to Trai to avoid discontinuation of the relief,” Mr Ramachandaran said.

However, a Trai official clarified that the relief will continue for the first and second operators in the ‘C’ circles. “We will put this clause in the final recommendation, before sending it to the government,” he said.

The overall licence fee has been brought down to 6 per cent from 15 per cent for some services. The 5 per cent licence fee is the minimum fee any operator has to pay as part of its contribution to the Universal Service Obligations (USO) fund used for subsidising the rural communication connectivity services.

In case the Trai recommendations are approved, out of the 6 per cent licence fee paid by any telecom service provider, 5 per cent will go as contribution to the USO fund and one per cent towards the telecom bodies.

The recommendations also include incentives for small/niche operators. They can offer any telecom service without paying the entry fee. They will, however, pay 6 per cent of their revenue as licence fee.

An entry fee of Rs 187 crore for an all-India unified licence will enable a new operator to roll out any communication service, with additional charges for spectrum or wireless services.

In its draft recommendations on unified licensing, Trai has suggested an across-the-board cut on licence fees to 6 per cent from as high as 15 per cent. The recommendations also include opening up of Internet telephony, but with a one-time payment of Rs 107 crore.

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