Telecom ministry to seek licence fee cut

Telecoms ministry will seek a fast-track approval from the finance ministry to cut the annual licence fee paid by large operators by up to a third, the Economic Times newspaper reported, a move that could bring some respite to the firms fighting a price war.

The paper, citing an unnamed official in the telecoms ministry, said the ministry would also propose full licence fee exemption for fixed-line services.

The licence fee cut will mainly benefit Bharti Airtel , Reliance Communications , Vodafone Essar, and Bharat Sanchar Nigam Ltd, the paper said, as the four top operators' networks cover most of India.

India is divided into 22 telecom zones and four categories and operators pay up to 10% of their annual revenue as licence fee in lucrative zones.

Last year, the telecom ministry had said that licence fee would be cut by 200 basis points from April 1, 2009 for operators which cover 95% of population in a zone, but the plan was shelved later.

(Reuters)