New Delhi: Telecom regulator Trai on Thursday suggested a new definition of revenue for Internet service providers (ISPs) on which the government should levy eight per cent annual fee.
Industry officials said the recommendation, if approved, will increase Internet services up to 30 per cent and hit efforts to increase penetration in the country.
“The Authority recommends that a uniform licence fee of 8 per cent of the AGR (adjusted gross revenue) shall be applicable for all ISP and ISP-Internet Telephony licences,” Telecom Regulatory Authority of India said.
Government levies licence fee on AGR of telecom companies after deducting some components that are not earned from telecom services.
Trai said: “Revenue for the purpose of licence fee for ISP and ISP-IT category shall include all types of revenue from Internet services, allowing only those deductions available for pass through charges and taxes and levies as in the case of access services, without any set-off for expenses.”
Trai had earlier recommended that the government should levy eight per cent licence fee from April 1, 2013 but there were some questions raised on revenue items that should be considered for calculating final charges.
Internet Service Providers Association of India said the government’s decision to increase licence fee on Internet services will adversely effect its target to achieve 175 million broadband connections by 2017, and 600 million by 2020 as it will increase service tariffs.
ISPAI president Rajesh Chharia said Trai has allowed deduction of pass through charges from Internet services but still there clarity is required on items that will form part of pass through charges.
“If the government includes deduction of bandwidth and lease line charges in pass through than Internet rates will rise only eight per cent. If not, then cascading effect will be to the tune of 25-30 per cent,” he said.
