Mobile phone firms want licence fee eased

MUMBAI: India's cellular phone operators want the Union government to smoothen revenue-share licence fee to 6 per cent in its annual budget to be unveiled on Feb. 28, an industry body said.

They also want the government to do away with a multitude of taxes and charges and levy a single rate on the sector, T V Ramachandran, director general of Cellular Operators Association of India (COAI), said.

"We are getting positive feelers from the corridors of power," Ramachandran said about the sector's demand for softer licence fees.

A phone company had to shell out anywhere between 6 per cent and 10 per cent of it annual revenue as licence fees, depending on the service circle, he said. The average levy across the nation was 9 per cent.

A lowering and standardisation of this rate would remove procedural hassles and ease some of the burden of a 30 per cent total tax burden on mobile operators, Ramachandran said.

"The telecommunication sector is subject to a whole lot of taxes. We want all the taxes to be merged and brought into a single rate," he said.

COAI, which represents operators under GSM (Global System for Mobile Communications), also wants service tax on interconnection usage charges to be removed. "It creates a huge problem for the service providers," he said.

India's mobile phone market has now close to 150 million subscribers, adding 5-6 million users a month.