The Hindu : Business : Telecom Regulatory Authority to revisit Internet services policy

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Thursday, Dec 28, 2006
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Telecom Regulatory Authority to revisit Internet services policy

Seeks stakeholders' views

NEW DELHI: Concerned over huge revenue loss due to grey market operations and slow broadband offtake, the Telecom Regulatory Authority of India (TRAI) plans to review the policy of Internet services.

The loss of government revenue, unlicensed operation by certain firms and depleting market share of licensed operators are some of the reasons that necessitated a review of the policy of Internet services and ISP licensing conditions, TRAI said in a consultation paper that sought views from stakeholders. The Department of Telecom will address key issues such as large number of ISP licences, grey market operations, level playing field vis-a-vis other licensed telecom service and slow growth of broadband services, according to the consultation paper.

TRAI observed that though 389 ISPs have so far been given licences to operate Internet services, the top 20 cover 98 per cent subscribers. Similarly, while Internet telephony has been permitted to 128 ISPs, only 32 are providing the service. With the slow growth of Internet and broadband, it is not likely to achieve the target of 18 million Internet subscribers and nine million broadband connections by 2007, the regulator said.

The TRAI document also discussed other issues such as different foreign direct investment limits for provision of similar services under different licences, no licence fee, limited performance bank guarantee and charging of radio spectrum based on allocated frequency.

While ISPs have demanded for permission to provide emerging new services as IP-based value added services, other licensed operators want a level paying field as ISPs virtually pay no licence fee and very low performance bank guarantee. ISPs are permitted to have 100 per cent FDI if they do not set up their own gateway and 74 per cent FDI if they set up their international gateway.

The spectrum charging mechanism for ISPs is based on complex and at times costly technology, the regulator said. — PTI

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