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Shakedown ahead for Internet service providers

business Updated: May 09, 2007 21:35 IST
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To get non-serious Internet service providers out of the system, the telecom regulator will propose a revenue share of 6 per cent and will seek an entry fee in three slabs of Rs 20 lakh, Rs 10 lakh and Rs 5 lakh, up from the existing Re 1 they pay as a licence fee now.

The three-slab entry fee will apply to Internet service providers in categories A, B and C, representing all-India operations, major cities and smaller towns. The Telecom Regulatory Authority of India will also propose a directive asking category C licence-holders to upgrade to category B within two years.

"We will submit our recommendations to the DoT on Thursday. I cannot give any details now. The recommendations will have a positive impact on Internet services in India,” said Nripendra Misra, chairman, TRAI. The DoT had asked the TRAI to review Internet service providers and the issues under discussion will determine the future of Internet services in India.

There are about 389 Internet service providers in the country, of which only 135 report their subscriber numbers to the DoT, while the rest have not furnished any evidence of having launched services.

Sources in Trai said, "Category C Internet service providers are only franchisees in districts and are not doing much for the spread of the Internet. The aim is to make them add more subscribers over a wider area."

Last December the DoT had sought the TRAI’s views on the large number of defunct Internet service providers, grey market operations, a level field vis-à-vis other licensed telecom service providers, and to bring about an effective, regulated and forward-looking Internet service provider licence.

"One of the issues that has been sorted out is a level playing field. There will be a revenue share equal to what the telecom operators pay and an entry fee to discourage non-serious players. Further, Internet service providers will have to submit a routine report on their aggregate gross revenue like other telecom operators to the DoT. This will have to be done by all Internet service providers in India, both old and new," the source said.