New Delhi: Department of Telecommunications is readying a proposal to bring mobile tower companies under the licencing regime following government's decision to allow 100 percent Foreign Direct Investment in the telecom sector, official sources said.
Mobile tower companies, called IP-I in technical jargon, will have to pay 8 percent licence fee on the revenue earned from telecom services if brought under the licencing regime.
At present, they can operate by paying Rs 5,000 to register with the Department of Telecommunications (DoT).
The DoT's proposal will be placed before Telecom Commission, an inter-ministerial panel, the sources said, adding that if approved tower firms would have to obtain telecom licence for carrying out their operations.
Telecom regulator TRAI had recommended bringing telecom tower companies under the licencing regime. The suggestion had been opposed by industry players.
TRAI estimates that bringing IP-I under the licensing regime will fetch the government revenues of around Rs 1,900 crore per year.
Tower And Infrastructure Providers Association (TAIPA), the industry body representing mobile tower companies like Bharti Infratel, Reliance Infratel and Indus Tower, opposed the proposal on mainly two grounds -- FDI limit and definition of revenue on which they would have to pay the licence fee.
"In order to include IP-I in licensing regime, one of the hindrance was that FDI limit was 74 percent for telecom services and IP-I was allowed with 100 percent FDI. Now that issue has been resolved with 100 percent allowed in telecom sector," the official said.
"Secondly the AGR (adjusted gross revenue) definition has to be revisited for which a reference may be required to be made to TRAI. Keeping this in view, the approval of the Telecom Commission will be sought to include IP-I in licensing regime," the official added.
According to industry data, tower companies clocked revenues of Rs 23,580 crore in the year 2010-11.
As per government, bringing mobile tower companies under licences will help in reducing cost of telecom services, faster nationwide rollout of infrastructure, sharing passive as well as active infrastructure like optical fibre network etc and contribute to the government's revenue in terms of licence fee, among others.
