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TRAI cautions DoT against uniform licence fee structure news
14 September 2009

The Telecom Regulatory Authority of India (TRAI) has advised the government against doing away with the variable licence fee structure and replacing it with uniform licence fee for all telecom operators.

The telecom regulator has urged the government to consult it before deciding on a uniform licence fee for operators for, what TRAI said of implications on the government's revenue, business of service providers and the subscribers.

The Department of Telecom (DoT) has decided on a uniform licence fee of 8.5 per cent for all types of telecom service providers in place of the existing variable licence fee structure.

DoT's proposal for a uniform fee structure was intended to plug the loophole in the current system where the operators were giving wrong financial reports to take arbitrage out of the variable fee structure.

Integrated operators used to take arbitrage, allegedly loading up maximum revenues on licences with lower fee.

However, according to TRAI, the proposed change in the licence fee would impact both government revenue and the operators' businesses which, in turn, will affect the subscribers.

In case the matter is referred to TRAI, which is the policy-making body of the DoT, the telecom minister is likely to intervene seeking a quick decision. TRAI decides on issues through a process of consultation and recommendation.

TRAI, however, wants the telecom department to consider the views of all stakeholders before arriving at the new fee structure.

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TRAI cautions DoT against uniform licence fee structure