DoT asked to review decision on licence fee for Net service providers

The Prime Ministers Office has asked the Department of Telecom to review its decision to impose licence fee on Internet Service Providers.

Under the new Unified Licence regime, DoT has proposed to collect eight per cent of the annual revenues as licence fee from Internet companies. At present ISPs do not have to pay revenue share. The Internet Service Providers Association of India had written to the PMO seeking its intervention. The Internet companies have told the Government that the fee would hurt the industry at a time when the focus was on rolling out broadband services.

Communications and IT Minister Ravi Shankar Prasad has invited the Internet companies for a meeting on Thursday to discuss the issue.

The Internet companies had earlier told the Telecom Regulatory Authority of India (TRAI) that Internet penetration in the country was still low and imposing a fee would be detrimental to the Government's plan to have broadband reach the masses.

ISPAI said charging a licence fee on pure Internet services may be counter-productive since all charges will ultimately be paid by end-subscribers who may not opt for the services if they become costly. Currently, companies with the ISP licence are allowed to deduct revenues from pure Internet services while calculating the licence fee payable to the Indian Government. Pure Internet refers to providing both Internet access and content, but not voice services.

However, Internet services provided by mobile players through 3G and 4G technologies come under the purview of the licence fee. Mobile operators, therefore, say this discrepancy should be removed to level the playing field with broadband operators by imposing the fee on all players.