Govt To Simplify Licensing Regime After Telecom Bill Is Enacted: Ashwini Vaishnaw

The Central government will come out with a second set of reforms to simplify the licensing regime after the finalisation and passage of the new Telecom Bill, Communication Minister Ashwini Vaishnaw said. The industry has long been demanding that the levies on it be reduced. Currently, various levies account for 30 per cent of the total revenues of the operators.

“Our next set of reforms will happen immediately after the Telecom Bill is enacted. We will be significantly simplifying the licensing regime,” the minister said on the second day of the ongoing India Mobile Congress here.

Reduction in licence fee is another of industry’s demand. Currently, operators pay 8 per cent of their adjusted gross revenue as licence fee. Of this 5 per cent goes into the universal service obligation fund (USOF) and balance 3 per cent to the exchequer. The industry has demanded that since 49 per cent of USOF is unutilised, this levy should either be reduced or frozen till the funds are fully utilised.

The industry is also demanding a cut in GST rate of 18 per cent as telecommunication is an essential service. On October 1, 2022, Aditya Birla Group chairman Kumar Mangalam Birla said that critical policy interventions by the government in the telecom space had boosted investor confidence and he hoped that the sector will continue to receive policy support.

In September last year, the government had simplified a number of structural and procedural reforms for the sector to promote healthy competition, protect consumers’ interest, infuse liquidity, encourage investment and reduce the regulatory burden on telecom service providers. The reforms also included moratorium on regulatory dues of telecom operators, rationalisation of adjusted gross revenues and bank guarantees and allowing 100 per cent foreign direct investment through the automatic route.

“We addressed the most pressing issues in September last year, then we looked at the wireless planning commission reforms. The reforms related to right of way norms have been dealt with in the Telecom Bill,” Vaishnaw said.

On the draft Telecom Bill, the minister said he has received feedback on the subject whether over-the-top (OTT) services should be covered as part of telecom services and be brought under licensing.

“Immediately after the India Mobile Congress (IMC), we will have a roundtable with industry and other stakeholders to discuss the final draft of the Telecom Bill,” Vaishnaw said.

In the draft Bill, the government has proposed regulation of OTT services provided by the likes of WhatsApp, Signal and Telegram. Last month, the minister had clarified that the government will have light-touch regulations for OTTs.

However, a section of industry has opposed bringing OTTs under any form of licensing regulation arguing that it would kill innovation. Further, there’s some overlap here as information and broadcasting ministry and ministry of electronics and IT currently oversee certain aspects of OTTs as part of IT Rules.

Meanwhile, telecom secretary K Rajaraman said that India likely to witness satellite-based broadband services by the middle of next year. The department of telecommunications has already sent its reference to the Telecom Regulatory Authority of India to auction the spectrum in the 27.5-28.5 MHz band, which is essential to rollout satellite broadband services.

“We are waiting for TRAI to send their recommendations on the satellite spectrum band to be put on auction,” he said on the sidelines of India Mobile Congress. “We expect the process to complete in about 9-10 months,” he added.