Revenue sharing in private telecom services will be ushered in from August 1. The Cabinet note is now finally expected to be cleared by the Union Cabinet next week.

The government has also proposed in the note that revenue sharing will not be implemented in a cellular circle if one of the two service providers decides to stick to the existing licence-fee system.

The extension for effective date of licence period has been finally fixed at six months for basic and cellular service providers in non-metro circles.

The Government has also proposed the constitution of a Telecom Development Fund to be established by August 15, 1999. The fund will facilitate the DoT for execution of developmental schemes specially in rural, semi-urban and remote areas.

Advance copies ofthe Cabinet note have been made available to the finance ministry, law department with the request that their views on the subject be expressed at the Cabinet meeting itself.

The final package for migration of all existing metro and circle celluar operators as well as basic services licensees to the NTP-99, states that the cut-off date for the change-over be fixed as August 1, 1999.

In addition, the per centage of revenue sharing will be decided by the Government based on the Telecom Regulatory Authority of India (Trai) recommendations. The same percentage will apply to the new licensees also. In view of the urgency of the matter, Trai would be asked to forward their recommendations on entry fee and revenue share for cellular and basic services latest by July 31, 1999. However, in case the TRAI is not able to forward its recommendations early, the Government will take an interim decision to fix licence fee as 15 per cent of the gross revenue subject to subsequent adjustments as per the final decision tobe taken after recieving recommendations of the regulator.

The licence-fee dues payable up to July 31, 1999, as per the existing license conditions, would be treated as the entry fee. All licencees will have to pay a further 15 per cent (thereby taking the total to 35 per cent) of the total license fee dues alongwith interest for the period upto July 31, 1999 on or before August 15, 1999.

The balance of the dues plus interest for the period up to July 31, 1999 is to be paid by January 31, 2000. In addition, the operators will have to securitise the balance outstanding license fee dues by furnishing requisite bank guarantees (BG) coupled with an undertaking to keep the bank guarantees alive till the arrears are cleared and also to enhance the same to cover the further sums which become sue.

It has also been clearly stipulated in the package offer that the existing licensees would forego their duopoly rights and that they would henceforth operate in the multipoly licensing regime.

The migration will beacheived through an amendment of the licences or by a rule making exercise under the Indian Telegraph Act 1885, as advised by the Attorney General.

The proposed telecom development fund will be set up under the public account of the general budget. The revenues to be realised from the existing operators together with other dues recoverable from the migration to the NTP and the revenues from new operators may be credited to this fund. The management of this fund will be entrusted to the full telecom commission.