Trai for national licence to up rural telephony

Move to encourage 'specialist rural telecom suppliers'.

In yet another move to increase the rural tele-density, the Telecom Regulatory Authority of India (Trai) has recommended that the government create a national rural telecom licence, that allows companies to operate all kinds of telecom services, exclusively in rural areas.

The regulator has proposed that companies which offer services under the new licence be charged only a nominal entry fee and be exempted from all other charges, including licence fee, spectrum fee and revenue share.

Trai had earlier recommended that niche operators be permitted in rural areas without any licence and spectrum fee. The regulator has said the new licence will be a "variant of a niche licence" and will lead to the "emergence of specialist rural telecom suppliers".

For existing telecom operators, the regulator has reiterated that the government abolish spectrum charges for rural operations. But it has added that that semi-urban and semi-rural areas in the periphery of large towns be excluded from the definition of 'rural'.

The regulator also favours eliminating licence fee for existing operators "in areas that are genuinely rural". "This elimination must be done carefully in the case of licence fees that are based on revenues. The possibility of mis-specification of revenues from semi-urban as rural by operators must be guarded against," it said.

The government has also been advised that the elimination contingents be extended only after operators put in place "satisfactory accounting and audit systems which can ensure distinctions between rural and urban revenues".

"If there are no mobile suppliers in a geographical area, then the case for zero licence fee is overwhelming, if there is one operator, then the case is strong, if there are two the case is weak," the regulator added.

These proposals are an extension of the October recommendations, when the regulator had asked the government to extend a subsidy of Rs 8,000 crores to all access service providers for rural operations.

It had also said the government should do away with its present policy of subsidies only to BSNL-based operations on the number of basic connections. It had called for an "alternative approach" with the focus on network expansion for mobile services and infrastructure-sharing. In the offing

Nominal entry for cos which offer services under the new licence

No licence and spectrum fee for niche operators in rural areas

Semi-urban and semi-rural areas to be excluded from the definition of 'rural'

Operators have to put in place 'satisfactory accounting, systems which can ensure distinctions between rural and urban revenues"