Broadband – Internet Rates May Go Up by 30% as DoT Decides to levy Fee on it in Unified Licence

Using the Internet or Broadband may become costlier up to 30%  as the Department of Telecom changed its rules of telecom licences agreement bringing revenue from Internet or Broadband services under its cess net.

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Earlier the initial version of the Unified Licence which was introduced on August 2,2013 , DoT had exempted Internet – Broadband services revenue from adjusted gross revenue (AGR) – part of telecom company’s earnings on which annual licence fee is levied. But now DoT  issued corrigendum to this new telecom licences agreement (Unified Licence) bringing revenue from these services under its cess net.

It had said that AGR will be calculated after deducting revenue from pure Internet (access and content) services, sales tax paid to the government and roaming revenue paid to other operators from the total revenue earned by telecom service providers.

However, in the corrigendum on calculation of AGR DoT has mentioned  “Revenue from Pure Internet Service under heading B-Deduct stands deleted.”

Under the new Unified licences telecom operators, including Internet services providers, will have to pay uniform licence fee of 8 per cent annually on AGR.

The Internet Service Providers Association of India has warned the step would lead to hike in consumer rates by up to 30%.

Mr. Rajesh Chharia, President, ISPAI said ”the move is a major setback in broadband penetration, especially in rural India, as there will be cascading effect and license fee on multi point will increase broadband price by 30 per cent”.

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All new telecom services providers are required to take Unified Licence, while as of now there would be no effect on existing companies because will have to migrate to the new licence on expiry of their permits for continuing their services.