The department of telecommunications (DoT) is believed to have agreed in principle to waive a Rs 350-per-junction-line fees levied on paging operators. Junction lines are used to link the equipment of paging companies with the exchanges of the department.
In an attempt to give a boost to the sagging fortunes of the industry, paging service providers have sought a reduction in licence fees that they have to pay the government. A delegation of paging companies, which met telecom secretary A V Gokak last month (APRIL), made these suggestions as part of a package mooted to rejuvenate the ailing industry.
Gokak is reported to have agreed to waive the junction line fee at the meeting.
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The licence fee charged from pager companies varies from one city to another, but about Rs 300 crore is expected to accrue to DoT over three years. One-sixth of it has to be paid in the first year, two-sixth in the second year and three-sixth in the third year. The fee in Mumbai is Rs 10.5 crore for three years, Rs 7.5 crore in Delhi and Rs 2 crore in Ahmedabad.
The fee charged for providing junction lines is a combination of the cost of constructing a 30-channel link the point of interconnect between the DoT and paging networks and the monthly rental. The aggregate monthly rental (Rs 350 per line a month) for the paging operator depends of the number of junctions lines used by the paging company. The monthly rental, say paging operators, is double the amount that should be charged.
The paging industry has been recording losses of about Rs 15 crore a month with about 550,000 pagers operating in the country. This is in spite of an increase in the subscriber base by about 30,000 every month.
Paging operators have been complaining that the tariffs (Rs 250 per month) they are allowed to charge customers is too low, while they have to bear the burden of the subsidy (estimated at about Rs 1,500-2,500) on each pager.
The situation worsened with a fifth operator Eider Paging being licensed to provide the services in 11 cities last year, under a Supreme Court order. Until then, the number of paging service providers was four in major cities and three in small ones.
Paging companies, however, are still pumping in huge funds in their ventures as they believe that a boom is just around the corner. The optimism stems from a reduction in the cost of pagers. Besides, regional languages services introduced recently are economical and would bring down the operating cost of service providers.