Much to the delight of India’s private telecommunications providers, the Indian government is offering private telecommunications companies some relief from high licensing fees in the form of a revenue-sharing regime.
The Union Cabinet said providers of basic, cellular, paging and other value-added services also will get their 10-year licenses extended for another 10 years.
To be eligible for the regime though, operators will have to accept several conditions, including accepting multiple new competitors in their telecom market.
All participating operators will have to pay 15 percent of their dues (inclusive of interest on arrears) by the end of the month. This is in addition to the 20-percent fee already remitted by most companies.
All arrears will have to be paid by Jan. 31. In the interim, outstanding debt will have to be secured at every stage.
Operators also must drop all litigation against the Department of Telecommunications, and existing investors will be barred from selling their stakes for five years from the date of the original license agreement.
Until now, India has auctioned licenses for one basic service provider and two cellular phone services in each region of the country.
India’s mobile telecommunications suffered heavy losses under the old regime due to heavy license payments and high interest costs. With the new regulations in place, most cellular phone companies said they expect to have positive cash-flow this year, with big city operators expected to gain the most.
