Tower companies get respite from paying license fee

Department of Telecommunications (DoT) has provided some relief to tower firms by keeping suspended the proposal to bring telecom infrastructure providers under the uniform annual license fee rule.

• It implies that companies such as GTL Infrastructure, Indus Towers and American Tower Corp (ATC) will not have to pay any license fee on their income (generating from the telecom operators for the use of their infrastructure) till further notice from the government on this issue.

Telecom infrastructure providers do not pay any license fee to DoT. However, under the new regime, it was proposed to bring all of them under a uniform licence fee rule, starting July 2012. Under the regime, by April 1, 2013, all licensees would be required to pay 8% of their adjusted gross revenues as annual fees.

Mobile operators utilize the passive infrastructure such as tower, building and antenna made available by infrastructure providers, who are registered with DoT. DoT had notified for including the unified service access licence providers, internet service providers, national long distance licences and international long distance licences under the uniform annual licence fee regime structure. However the decision on telecom tower companies has not yet been solidified. Govt is facing opposition from Tower and Infrastructure Providers Association (Taipa)

• However if the government imposes the license fee, it would generate additional revenue of Rs 1,400 crore annually for the government. In that case tower companies will have to pass on the costs of the license fee to the operators in increased rentals.

Month: Current Affairs - July, 2012