Govt waives off License fee of Telecom in Rural areas

In a move to promote telecom and e-governance service in the rural area, the Department of Telecommunication on Thursday has decided to waive off the license fee on rural landlines. However, for this move government will have to bear the annual revenue loss of Rs.200-crore.

At present, the Telecom Regulatory Authority of India (TRAI) charges the licence fee as per percentage of adjusted gross revenue (AGR) of a telecom company that range between 6% and 10% depending upon the area of operation.

The Telecom Commission in the recent meeting has decided to waive off the licence fee levied from the telecom players to motivate them to expand the network in the rural areas. The expansion of telecom network may also boost to set up new broadband connection, which would augment the e-governance, a direct administrative system through Internet system and would reduce the difference of digital device between the rural and urban areas.

Besides, in a second major decision, the telecom commission has also decided to reduce the levy charges towards the Universal Service Obligation (USO) from current 5% to 3 % of the Adjusted Ground Revenue (AGR), which has already covered up to 95% of rural areas.

The USO fund has been set up in a view to develop the infrastructure support in rural and remote areas for providing telecommunications service to people at affordable and reasonable prices. This reduction in levy charges would motivate the private players to set up their service in the rural and remote areas, which usually they avoid to do so due to pertaining heavy spends on set up establishment and maintenance cost.

Viewing the next election somewhere in the next six months, the UPA government is targeting to woo people of rustic and remote areas who contribute most in polling. To meet the target of 11th five-year plan, which is to escalate the teledensity of 25 percent by means of providing 200 millions new connection, from current 8 percent, the government wants to achieve a large portion of this target by initiating the project. On the basis of this commencement, government would try to take advantage of their deeds.

Currently, the Bharat Sanchar Nigam Limited (BSNL), the largest public telecom company is dominating the overall landline telephone sector service while in the rural and remote areas; its percentage share is more than 90% of total landline connection.