Internet Rates Likely to Go Up if New Licensing Regime Comes to Force: Report

Mobile TowerInternet rates in the country might go up if the proposed one time licensing fee under the new regulatory framework mooted by the telecom department is put in place.

The president of Internet Service Provider Association of India (ISPAI) told the Press Trust of India that the cost of Internet and broadband services will go up if the Internet service providers opt for Unified License.

The department of telecom, while leaving the option for service providers to continue with the old license format, has proposed a new national level unified license cost under which telecom companies can provide services that don’t require paid spectrum.

“If Internet service providers opt for UL, then cost of Internet and broadband services will go up,” ISPAI’s President Rajesh Charia told PTI.

Almost a year ago, the telecom regulator had recommended a Rs 15 cr non refundable entry fee for unified license to be paid by service providers at a national level. It had also set a Rs 1 cr licensing fee of Rs 1 crore for service area level license and Rs 10 lakh non refundable entry fee for district level unified license.

The Back Story

After the Supreme Court scrapped license of telecom operators allegedly involved in the spectrum scam, the Department of Telecom proposed the Unified License regime under which the operators who don’t have licensed spectrum can provide services that don’t need to use paid spectrum. Existing telecom licenses will be converted to unified license and continue with the same validity and conditions as existing ones.

If newer service providers pass on the cost of unified license to the customers and jack up the prices, won’t they be at a disadvantage compared to the existing players who provide the same service for cheaper? Unless, they all form a cartel and decide to jack up the prices together. That would be anti competitive isn’t it? What are your thoughts?

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