1. Reliance Jio offer not to blame, fall in government revenues from telecom due to DoT ignoring reforms: Trai to tell Telecom Commission

Reliance Jio offer not to blame, fall in government revenues from telecom due to DoT ignoring reforms: Trai to tell Telecom Commission

Sources said the Trai is likely to firm up its reply in response to the Telecom Commission’s letter to it recently, which blamed the former for not handling Jio’s promotional offer in a proper manner which led to a decline in government’s revenues during Q2 and Q3 of the current fiscal.

New Delhi | Published: March 8, 2017 5:52 AM
Telecom firms pay 8% and 6% of their adjusted gross revenue as licence fee and spectrum usage charge respectively. (Reuters)

The Telecom Regulatory Authority of India (Trai) is likely to inform the Telecom Commission (TC) that the decline in government revenues from telecom firms in the last two quarters of the current fiscal is not due to the promotional tariff of Reliance Jio, but because of the department of telecommunications not taking reform-oriented steps as recommended by the regulatory body.

Sources said the Trai is likely to firm up its reply in response to the Telecom Commission’s letter to it recently, which blamed the former for not handling Jio’s promotional offer in a proper manner which led to a decline in government’s revenues during Q2 and Q3 of the current fiscal.

Telecom firms pay 8% and 6% of their adjusted gross revenue as licence fee and spectrum usage charge respectively. Since incumbent operators tried to match Jio’s promotional tariff, there was a race to the bottom which led to decline in revenues of the operators, and hence of the government also, the TC had said.

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Trai officials said their recommendations asking for reforms like reducing the licence fee from 8% to 6%, making SUC flat to 3% and later to 1%, increasing the duration of deferred payment spectrum amount to 20 years from the current 10 years, were not implemented by the DoT, which is to be blamed for the health of the industry and hence for declining revenues of the government.

Expressing displeasure that Trai allowed a promotional offer to continue beyond the stipulated 90 days and then allowed a subsequent promotional offer, the Telecom Commission had advised the regulator to discharge its duties in proper letter and spirit so that government revenues are protected and the sector’s orderly growth takes place.

– Rishi Ranjan Kala

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