Bringing infrastructure providers under the revenue sharing regime is illogical: TAIPA

The Tower & Infrastructure Providers Association (TAIPA) has opposed the Telecom Regulatory Authority of India (TRAI)?s suggestion to bring telecom infrastructure companies under the revenue sharing regime.

Prior to this, TRAI had recommended that tower companies, infrastructure providers and internet service providers be brought under the revenue share regime and also that these companies be asked to pay 6 per cent of their annual sales to the government.

Meanwhile, the Telecom Commission had accepted the regulator?s proposal, but increased the revenue share to 8 per cent for all telecom services.

In response, TAIPA has said that the regulator?s recommendations were irrational, illogical and legally untenable.

Currently, tower companies are not subject to licence fee or revenue share. TRAI had asked the Department of Telecommunications (DoT) to impose a revenue share on telecom tower companies and internet service providers at 3 per cent on their annual revenues by 2012-13 and 6 per cent by 2015-16.

In a letter to DoT, TAIPA said that TRAI?s recommendations ran contrary to draft policy on licensing. The industry body added that TRAI was exceeding its brief as it recommendations opposed the government’s intent to encourage sharing of passive infrastructure among telecom operators.

The recommendations were “patently against all principles of natural justice”, the letter added.

TAIPA also pointed out that tower companies do not render telecom services to the end consumer but only provide infrastructure-related services to the operator who services the customers.

It said that TRAI?s recommendation would result in the encompassing of all infrastructure providers, IT services providers, physical infrastructure providers and auditors and consultants, who would have to pay licence fee. This, it said, would be irrational.

The industry lobby also said that imposing a licence fee on tower firms would result in double taxation, increasing cost to operators, which in turn would discourage the development of common infrastructure.