The Department of Telecommunications (DoT) has proposed the removal of licensee fees (LFs) from the fixed-line broadband internet services, including the IPTV service. The development has been reported by ET Telecom, quoting sources that the telecom department is looking to provide a 10-year relief to the fixed-line broadband internet services along with the IPTV service. The final decision on the matter will be taken by the Digital Communications Commission (DCC) in a meeting scheduled for May 12, 2022.
This will be a big step towards the proliferation of fixed broadband internet services in the rural and backward areas of the country. It will give Internet Service Providers (ISPs) a lot of legroom for faster investment into expanding services throughout the country and be more profitable.
Will DCC Side with the Proposal of DoT
The decision from DCC hasn’t arrived yet, so there is no confirmation whether this will happen or not. At this stage, it is just a proposal from the DoT! But DCC’s decision will be something that the entire fixed-broadband internet service industry would be looking out for.
Currently, the ISPs have to pay a licensee fee of 8% on their adjusted gross revenue (AGR), both for wireless and wireline services. If the DCC sides with the proposal from DoT, it would mean that the fixed-line broadband ISPs will not need to pay 8% LF on their AGR.
This should also affect the profitability of both Reliance Jio and Bharti Airtel, who run two of the largest FTTH service brands in India, namely, JioFiber and Airtel Xstream Fiber. Note that the LF removal has only been proposed for the fixed-broadband service providers. Wireless service providers will continue to pay LF on their AGR.
The government of India is trying to expand the reach of fiber connectivity across the country through its national broadband mission. This decision for DCC should be easy in light of that, given that it will only promote the reach of connectivity across India at a faster rate.