The Department of Telecommunications (DoT) has called off its decision to cut the licence fee for telecom operators by up to a third from April 1, 2009, following opposition from the finance ministry.

The Department of Telecommunications (DoT) has called off its decision to cut the licence fee for telecom operators by up to a third from April 1, 2009, following opposition from the finance ministry. DoT had earlier announced that the proportion of revenue paid by telecom operators as licence fee to the government would be cut by 2 per cent of their total revenues, if they could prove that their services were available in 95 per cent of the residential areas in a state or a telecom circle. Currently, telecom operators pay 6 per cent, 8 per cent and 10 per cent (based on the ranking of their circles) of their adjusted gross revenue (AGR) as licence fee. According to DoT’s plans, in 2009-10, these would have come down to 4 per cent, 6 per cent and 8 per cent of AGR for operators with comprehensive networks. If implemented, the licence fee cut will help operators save Rs 20 billion in 2009-10.