Sops likely for radio paging industry

Category II infrastructure providers may also get licence fee exemption

The Telecom Regulatory Authority of India (Trai) is likely to propose a licence fee exemption to radio paging companies and category II infrastructure providers (IP-II) like Gail (India) Ltd, Railtel Corporation and Power Grid Corporation of India Ltd.

"The dying paging industry must survive. Licence fee waiver will certainly give a boost to their financial," an official involved in the process told Business Standard.

Trai recommendations are expected as part of the draft recommendations for the unified licensing regime, expected later this week. The regulator will try to bring all services under one licence.

Under the present norms, radio paging companies are required to pay a fixed licence fee for the first three years of the operation and subsequently, pay the fee on the basis of revenue sharing.

Since, the cellular service providers were allowed to offer short messaging services without paying any fee, radio paging companies have been demanding a waiver of their licence fees.

With a drastic decline in their subscriber base, revenues of the industry have also come down by 70-80 per cent, forcing six companies to shut shop.

On the issue of licence fee waiver for IP-II players, an official said, "We don't see any logic in charging licence fees from infrastructure providers as the telecom service providers pay licence fee. This leads to double taxation".

The regulator would try to ensure that all category of service providers would be better off, sources added.

Apart from three public sector units, IP-II licence has been granted to Hughes Escorts Communications, Spectranet and Tata Power.

The government had recently slashed the licence fees for this category of service providers to 6 per cent of their gross revenue, from the existing 15 per cent, as per the recommendations of the regulator. Telecom service companies buy bandwidth from infrastructure providers to carry their voice and data traffic.

 Turning pages

• Now, radio paging companies are required to pay a fixed licence fee for the first three years of operation and subsequently, pay the fee on the basis of revenue sharing.
• With a drastic decline in subscriber base of paging companies, revenues of the industry have come down by 70-80 per cent, forcing six companies to shut shop.
• No logic in charging licence fees from infrastructure providers as the telecom service providers pay licence fee. This leads to double taxation.