Fixed line telephony to get fee exemption

Fixed line telephony to get fee exemption

Press trust of India / New Delhi April 25, 2008

The government today said the fixed line telephony will be exempted from the license fee to encourage service providers especially in the private sector to go to rural areas.

"I have already asked the telecom commission to deliberate on the issue to exempt fixed line telephony from license fee, charged as percentage of Adjusted Gross Revenue (AGR)," Telecom Minister A Raja said at a function organised by Cellular Operators Association of India (COAI).

Despite a teledensity of nearly 25 per cent, 70 per cent of the population does not enjoy the fruits of telecom revolution, he said adding, "I call upon all the stakeholders (PSUs and private operators) to come forward and connect all the villages."

On behalf of the government, "I assure you all the help to go to rural areas." State-run BSNL would be the single largest beneficiary of Raja's announcement as the PSU was having nearly 90 per cent of the fixed line telephone connections but India's largest private operator Bharti Airtel welcomed the decision saying "fixed line telephony needs encouragement and it should not be burdened by taxes."

Commenting on the decision, Sunil Mittal of Bharti Airtel told reporters, "I am delighted. fixed line telephony must become recipient of funds and the operators should not be burdened with a host of levies like license fee of contribution to the Universal Service Obligation (USO) Fund.