Parekh for lower cell revenue sharing

Deepak Parekh, HDFC chairman, has recommended reduction in the revenue sharing obligations of the GSM cellular operators as a "fair compensation" for allowing full mobility to the basic service operators.

GSM cellular operators in A, B and C circles give 12 per cent , 10 per cent and 8 per cent of their revenue, respectively, to the government every year as revenue share.

Parekh made this suggestion recently in a presentation to the group of ministers (GoM) set up to resolve the dispute between GSM operators and basic service companies.

The GoM had earlier requested Parekh to make a presentation on the financial aspects of a migration to the unified licence regime. Parekh told the GoM that a lower revenue share would help avoid an adverse impact on the cost to consumers and provide relief to cellular operators.

Top government sources said Parekh was not in favour of the government paying compensation in cash to GSM cellular operators. First, it is not a feasible move given the fiscal situation. Secondly, it has no precedence.

Parekh, however, endorsed the views of the Telecom Regulatory Authority of India that basic service operators migrating to a unified licence should pay the difference between what the fourth GSM operator paid and what they had already paid for the basic licence.