Wrangle over license fee dues

By : |April 8, 1999 0

Finally, we have reduced cellular tariffs. After
almost an year of on-going tussle, low tariffs have become a reality,
though accompanied by high rentals.

But will this help cellular companies pay the license
fee?

The
problem

Cellphones promised a communication
revolution and companies jumped into providing the cellular services.
It worked everywhere, but in India global telecom majors are caught
in a wrangle with Telecom Regulatory Authority of India over license
fee payments.

                                 

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Service providers are unable to pay license fee
to the government-leave aside the entire sum, they are not even
paying 20 percent of the dues.

The
reason

In price-sensitive Indian
market service providers lost heavily-at least they claim so. Reason-people
bought cellphones but didn’t use them, courtesy high tariffs. Cellphones
are used like pagers, more or less.

Consequently, the service companies didn’t reap
the expected dividends. And the license fee was never paid. The
operators demanded reduction in tariffs so that people use their
cellphones.

To recover dues, the government proceeded to encash
bank guarantees of the four defaulters-Birla AT&T, Tata
Teleservices,
Hughes Ispat, and Essar Commvision. These operators have decided
to appeal to a division bench of the high court.

The
debate

The Cellular Operators Association
of India (COAI) is now demanding revenue-sharing regime (for cellular
services) instead of the existing license fee structure. Nothing
has been decided on this front yet.

Cellular operators debate that a meager 1.5 lakh
subscriber base in the country is far below the projections upon
which license fee was determined.

Though new tariffs bring a ray hope, the steep hike
in rentals-from Rs 156 to Rs 600-seems to be an insult to the injury.
The subscribers who make minimum use of their cellphones might just
back out.

Wait
and watch

Will the new tariff structure
help cellular operators recover the loss and pay up the dues, or
the only alternative is revenue-sharing regime? Coming days will
bring an answer to the question.

Whatever may be the result, one thing is sure. To
make India an IT superpower government has to resolve these telecom
issues fast. The sooner, the better-is the equation. For now, let’s
wait and watch!!

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