Misplaced Priority: Telcos need licence fee cut, govt scraps broadband charge

At a time when the financially-stretched telecom industry is looking for some relief measures like reduction in licence fee on mobile services from 8% of the adjusted gross revenue to 3-6%, the government has decided to instead scrap licence fee on fixed-line broadband services. This does not provide any kind of relief to the firms as revenues from fixed-line broadband are miniscule .

Telecom licences are of different categories. What is called access services licence is for mobile services where the bulk of revenue accrues. Operators pay a licence fee of 8% on their AGR here. There’s a separate licence called fixed-line licence under which wired broadband comes where also the licence fee is 8% of AGR but the revenue accruing from these services is marginal for operators and even the government in the form of licence fee.