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Wrangle over license fee dues

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CIOL Bureau
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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.

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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.

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.

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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.

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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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