The Telecom Regulatory Authority of India (TRAI) yesterday issued the recommendations on “Rationalisation of Entry Fee and Bank Guarantees.”
TRAI has made recommendations to the government for reducing the entry fees across various licence authorisations and the merging of bank guarantees. It is expected that reductions in entry fee will lead to the entry of new service providers in the market, increase investment and enhance competition in telecom sector. The merging of bank guarantees will encourage ease of doing business and enable licensees to make investments in the sector thereby ushering the growth in the sector. Both these measures will improve the quality of service and enhance consumer welfare.
The authority has also recommended no entry fee at the time of renewal of licence to ease the financial burden on existing, as well as new entrants, and will be beneficial for UL (VNO) licensees especially.
The salient features of the recommendations are as follows: –
- The entry fee should be reduced from the present levels for Unified License (UL) as well as Unified Licence (Virtual Network Operator) (UL (VNO)) licences.
- No entry fee for M2M (A/ B/C), Audio conferencing/Audiotex/Voice mail service, ISP “C” recommended.
Entry fee for following UL authorisations should be rationalised:
a) Access service: from Rs 1 crore to Rs 50 Lakh for each telecom circle/metro area; from 0.5 crore to 25 lakh for J&K and North east each
b) NLD and ILD: from Rs 2.5 crore to Rs 50 lakh
c) PMRTS: from Rs 50 thousand to Rs 20 thousand for each telecom circle/metro area.
d) ISP “B” : from Rs 2 lakh to Rs 50 thousand for each telecom circle and Rs 25 thousand for J&K and North-East each
e) ISP “A” : from Rs 30 lakh to Rs 10 lakh
- The entry fee for UL (VNO) authorisations reduced substantially to promote competition and improved provision of services.
- There should be no entry fee at the time of renewal of licences.
- For Unified Licence, Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG) should be merged into a single bank guarantee for securitising the dues, to cover the violation of licence conditions and to ensure the performance under licence agreement.
- Similarly, for mobile number portability licence, FBG and PBG should be merged into a single bank guarantee.
- For enhancing the ease of doing business, the process for submission of electronic bank guarantee should be adopted.
