TRAI seeks stakeholders' views on ISP revenues

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Telecom regulator TRAI Friday sought inputs from stakeholders on defining components that should be considered revenue of Internet service providers (ISP), including 4G spectrum holders.

"Stakeholders are requested to give their comments on definition of AGR (adjusted gross revenue) for all three categories of ISP licences," TRAI said in its consultation paper on 'Definition of AGR in Licence Agreements for provision of Internet Services and minimum presumptive AGR.

The government imposes licence fee on AGR.

For the purpose of arriving at AGR currently, charges from pure Internet service, activation charges from pure Internet subscribers and roaming revenue actually passed on to other eligible/entitled telecom service provider, among others, are excluded.

Telecom Regulatory Authority of India (TRAI) has issued a consultation paper following recommendations sought by the Department of Telecommunications (DoT) on the matter.

The DoT has amended the ISP licence on June 29 and will impose a uniform licence fee of 8 per cent from April 1, 2013 on AGR.

The DoT has sought TRAI's recommendation on minimum presumptive AGR, which is a new format, and value that can be applicable for BWA (Broadband Wireless Access) Spectrum holders under Internet Service and Access Service licenses, keeping in view the agreement that it had with winners of 3G and BWA spectrum auction.

Reliance Industries owned Infotel Broadband, Bharti Airtel, state-run BSNL and MTNL, Aircel, Tikona Digital, Augere and Qualcomm hold BWA spectrum that can be used for 4G services in 2010.

Infotel is only player among eight firms that holds a pan-India BWA spectrum.

Out of these players, only Bharti Airtel and BSNL are providing services using BWA spectrum. Other players are yet to roll out their network.

On introduction of a new form of AGR, TRAI said some service providers have not started their operations even after the lapse of sufficient time from the date they were issued licences. Thus, they are not generating any revenue which is resulting in loss of revenue for government as well.

"...the licence fee and spectrum usage charges are being charged as percentage of AGR, in case some service providers do not roll out their service, they do not generate revenue and hence not liable to pay any licence fee and spectrum usage charges. This results in the loss of revenue to the government," TRAI said.

The new concept of presumptive AGR is floated to ensure that service providers "make sincere efforts in establishing network and start service at the earliest, a minimum licence fee and spectrum usage charges based on presumptive AGR may be considered."

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