Telecom regulator insists on licence fee for tower firms

The Telecom Regulatory Authority of India (TRAI) has insisted on bringing telecom tower companies under the Unified Licensing regime, which would make it mandatory for players like Indus Towers and Viom to start paying revenue share to the Government.

As of now tower companies are given an ‘Infrastructure Provider’ status and hence they are not required to pay any revenue share to the Government.

Additional revenues In 2010, TRAI submitted a proposal to bring tower companies under licensing on grounds that it would enable them to reduce restrictions from different local bodies while being rolled out. TRAI had said that the Government would get additional revenues of around ₹2,000 crore.

But DoT had put this in abeyance after tower companies protested. According to tower companies, the move to levy a licence fee was against the Government’s stated objective of expanding telecom infrastructure in the country.

Industry representatives said that forceful migration to the unified regime will increase the burden on tower companies already reeling under the overall slowdown in the telecom sector. They also said that the a levy on tower companies would amount to double taxation as the mobile operator who takes capacity has already paid a licence fee.

Separate entities Just when the industry thought that the issue was put on the back burner, the TRAI has raked it up again in a recent consultation paper. “The Infrastructure Provider -I (tower companies) are distinct legal persons entitled to earn revenues from their operations. Since the company is an entity in its own right, transactions of the company are independent from those of its shareholders (some of who may have interests in access service provider companies). Once IP-I and telecom service providers are treated as separate entities, the licence fee levies each pays to the Government are also to be accounted for separately if the existing framework is left undisturbed,” the TRAI said in the paper.

Licence fee A Delhi-based tower company said that the licence fee would be against the Modi Government’s stated position on encouraging infrastructure creation. “Tower companies are creating communication infrastructure and we are not using any natural resources from the Government. A licence fee now would be detrimental to the overall objective of reaching broadband to the masses,” said the head of a tower company.