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Updated: August 30, 2013 19:01 IST

Internet rates may go up as DoT decides to levy fee on it

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The Internet Service Providers Association of India has warned the step would lead to hike in consumer rates by up to 30 per cent. File photo.
The Internet Service Providers Association of India has warned the step would lead to hike in consumer rates by up to 30 per cent. File photo.

Using the Internet may become up to 30 per cent costlier as the Department of Telecom on Friday issued corrigendum to the new telecom licences agreement bringing revenue from these services under its cess net.

As per the initial version of the Unified Licence on August 2, DoT had exempted Internet services revenue from adjusted gross revenue (AGR) — part of telecom company’s earnings on which annual licence fee is levied.

It had said that AGR will be calculated after deducting revenue from pure Internet (access and content) services, sales tax paid to the government and roaming revenue paid to other operators from the total revenue earned by telecom service providers.

However, in the corrigendum on calculation of AGR DoT has said: “Revenue from Pure Internet Service under heading B-Deduct stands deleted.”

Under the new licences, telecom operators (including Internet Services Providers) will have to pay uniform licence fee of 8 per cent annually on AGR.

The Internet Service Providers Association of India has warned the step would lead to hike in consumer rates by up to 30 per cent.

ISPAI president Rajesh Chharia said the move is a “major setback in broadband penetration specially in rural India, as there will be cascading effect and license fee on multi point will increase broadband price by 30 per cent.”

He added that ISPs are in bad condition already and this will worsen their situation.

“The whole Internet broadband business will become pure monopolistic, which is not good at all for the country. Only 1 or 2 big player will survive and they will take the benefit of monopoly market,” Mr. Chharia said.

All new telecom services providers are required to take Unified Licence, while existing companies will have to migrate to the new licence on expiry of their permits for continuing their business.

According to recent report by analytics firm comScore, India has by passed Japan to become the world’s third largest Internet user after China and the US with 74 million Internet users.

As per telecom regulator TRAI, there were 15.13 million subscribers at the end of May.

It is a foolish decision to increase the internet rates! As the developed countries
decrease the rate for internet since it is the life in the future, this increase will make our
growth slow and affect our younger generation. Another funny thing our rulers of India
do is to raise the landline phones rate and make the mobile phone cheaper. Cell
phones affect our health so it is wise to encourage people to use the landline phones.

from:  Antony
Posted on: Aug 31, 2013 at 01:07 IST

You can't expect anything different from politicians who have murdered
the RTI

from:  anil
Posted on: Aug 31, 2013 at 00:44 IST

How short-sighted on the part of DoT and UPA govt to impose more tax on
internet access. These kind of myopic and visionless policies bear
primary responsibility for the economic mess that India is in today.
What the DoT and UPA govt doesn't realize that internet access has shown
to improve productivity of the country and empowerment of the people. I
wonder if PM Singh is in favor of these type of retrograde policies when
he spoke of the need for more reforms.

from:  Suvojit Dutta
Posted on: Aug 30, 2013 at 23:52 IST

We might be 3rd largest in internet users , But , we rank the lowest in terms of speed , with average around 256kbps, when TRAI in 2011 set the minimum speed to be 512kbps. The real scenario is even worst with BSNL or MTNL serving the rural india , while private players are reluctant to expand into these sectors. This increase is only going to worsen the issue.

When Sony just launched a 2GBPS internet connection in Japan , we dont even have a "decent" speed as average usage.

This is a regressive move and one that might fuel a state like that of United States , where there is proliferation of monopolies in ISP sector.

from:  Arun
Posted on: Aug 30, 2013 at 22:35 IST

Price hike is really bad idea. Improve service among consumer and build strong relationship firsy

from:  James
Posted on: Aug 30, 2013 at 22:29 IST

All the world over, where Internet is a force to reckon with in the
field of Information exchange, internet charges are lowered and DoT is
doing just the opposite! What a perception and what a method to improve

Posted on: Aug 30, 2013 at 21:35 IST

First of all they fail to check the loss of revenue in licensing polices and now claim to increase the service prices. Customers are easiest to cull and this move will leave few big players as service provider. Instead they should try to find constructive ways of generating revenue

from:  aadesh
Posted on: Aug 30, 2013 at 20:11 IST

It is requested the GoI and DoT, plz reconsider this decision as this decision obstructs the increasing trend of new mobile net users like me.....!

from:  Kiran
Posted on: Aug 30, 2013 at 20:08 IST
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