GOVERNMENT OF INDIA
Ministry of Communications and Information Technology
DEPARTMENT OF TELECOMMUNICATIONS

RAJAYA SABHA
UNSTARRED QUESTION NO.2545
TO BE ANSWERED ON APRIL 27, 2012
Trai’s Recommendation of Revenue Sharing

2545. Shri Rajeev Chandrasekhar:

Will the Minister of Communications and information technology be pleased to state:

a)     Whether TRAI in its recommendations of 11 May, 2010 has recommended revenue share of 6 per cent to be charged uniformly across all services.

b)      Whether the Telecom Commission has repeatedly rejected this recommendation of TRAI; and

c)      If so, the basis for this and its impact on consumers in terms of additional costs, if the Telecom Commission’s proposal of 8 per cent or 8.5 per cent is implemented?

ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY
SHRI MILIND DEORA

(a)    Sir, the Telecom Regulatory Authority of India (TRAI), in its recommendations dated May 11, 2010, has inter-alia, recommended that the license fee for all the services in all the telecom service areas, should progressively be brought to a uniform 6% of the AGR (Adjusted Gross Revenue) over a four-year period.                                       

 (b) & (c) the above recommendations of TRAI along with report dated 22.06.2011 of DoT Committee was considered by the Telecom Commission on 22.07.2011 which accepted the recommendations of DoT committee for a Uniform license fee of 8.5% of AGR across all telecom licenses in order to simplify the implementation and to protect the revenue of the Government.  Thereafter, the Government referred back the above said recommendation to TRAI on 10.10.2011.  In response, TRAI reiterated its earlier recommendation in the matter vide letter dated 03.11.2011.  The said recommendation of TRAI was reconsidered by the telecom commission in November-December 2011 which, under the overall circumstances examined therein, inter-alia, recommended that a uniform license fee rate of 8% may be adopted across all categories of licenses, i.e. access services in all categories of service areas, National Long Distance (NLD), International Long Distance (ILD), Internet Service Provider with Internet Telephony (ISP-IT), Internet Service Provider (ISP), Infrastructure Provider-I (IP-I), etc. in two yearly steps. Call rates are determined by the service providers based on several factors including input costs such as license fee. Bu these recommendations, the license fees of different rates i.e. 10%, 8% or 6% of AGR for category ‘A/Metro, ‘B’ or ‘C’ service area access service licenses respectively, are being made uniform wherein license fee for some service area will be decreased and in some service area will be increased.