Telecom Commission delays 8 percent fees on Internet Service Providers, to Stop Tariff Hike

towerThe Indian Government is working towards making India a digital country through better internet connectivity. As a result of promotion of the ambitious Digital India project, the telecom commission has delayed levying of 8 percent fees on the internet service providers in the country. This is because levying the fees would have restricted the penetration and rate of growth of internet connectivity in the country.

Had the fees been levied, the ISPs would have passed on the hike to the users which would have in turn increased the tariffs. The Department of Telecommunications Secretary, Rakesh Garg who also heads the telecom commission has stated in a meeting that the proposal of levying fees on ISPs needs to be discussed further as it is hamper Narendra Modi’s own project Digital India.

TRAI had suggested earlier this year that a uniform annual licence fee of 8 percent of the AGR (adjusted gross revenue) be levied for all ISP and ISP-Internet Telephony licences. This proposal was put forth first back in April 2013 but was postponed. The Internet Service Providers Association of India has said that increment in the license will be detrimental to achieve the target 175 million broadband connections by 2017 and 600 million by 2020 (as per National Telecom Policy 2012).

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6 Comments on "Telecom Commission delays 8 percent fees on Internet Service Providers, to Stop Tariff Hike"


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Javed Akhtar
November 5, 2014 10:42 pm 10:42 PM
For the unified licence govt is authorizing VoIP, IPTV and broadband service to providers now there is some techno-commercial problem with every service like VoIP is mostly limited in India so most providers even after having the licence not thinking to provide the service IPTV set-top box costs around 4k and with broadband setup costs about 6k initially so why someone will get iptv connection instead of DTH?? the the only useful thing is Licecne for broadband and this is why small ISP are applying for but bigger ISP who have regular ISP licence and large customer base don’t have… Read more »
October 21, 2014 10:09 pm 10:09 PM

The government will even impose 16% tax after attaining the target of more broadband customers !!!!.

October 21, 2014 7:16 pm 7:16 PM

Good move by the government, finally someone is focusing on the bigger picture. Hoping this promotes ISPs to get rid of FUP altogether and launch true unlimited broadband plans at least the wired ISPs.

Nikolai Gorchilov
October 22, 2014 2:11 am 2:11 AM

Unfortunately, AGR has nothing to do with FUP, as it was originally planned for next year onwards and FUP exists since the beginning of time.

ISPs are using FUP to improve their thin margins by pushing up the ARPU (average revenue per user). This IMHO is wrong strategy, as it prevents them to grow in numbers and achieve healthy margin by scale. I fully agree, flat unlimited packages are THE solution.