HAPPY SURFING

New Delhi, May 10: Telecom regulator Trai today proposed drastic steps to improve the quality of Internet service in the country.

The measures recommended by the Telecom Regulatory Authority of India include lowering the FDI limit from 100 per cent to 74 per cent and imposing an annual licence fee of 6 per cent of gross revenue.

The Trai recommendation is significant because this is the first time that a government-appointed body has suggested a rollback of FDI in any particular segment.

The government is in favour of a policy that will make FDI norms uniform in a given sector. Since FDI is capped at 74 per cent in mobile and fixed-line phones, the move to bring down the foreign direct investment in Internet service seems logical.

Trai, in its recommendations to the department of telecom, supported a liberal licensing regime to boost Internet penetration, but envisaged a framework that would enable “serious players” in this sector to offer services.

Internet service providers (ISPs), however, expressed apprehension about the proposed annual licence fee, saying this will increase the cost of broadband service.

But they felt lowering the FDI limit would bring about a level-playing field and improve services.

“The uniform licence fee of 6 per cent of adjusted gross revenues will affect end consumers as the cost of broadband service will increase by 6-24 per cent,” Rajesh Chharia, president of the Internet Service Providers Association of India, said.

Trai’s tough recommendations stem from the fact that out of the 700 ISP licences issued in the last three years, only 135 are now functional.

“The authority hopes the recommendations, if accepted by the department of telecom, will contribute to Internet penetration, curb grey market and effectively provide level playing field and above all serve consumers interest,” Trai said.

The telecom regulator has also suggested an entry fee of up to Rs 20 lakh. ISPs seeking licence at national level will have to pay Rs 20 lakh as entry fee while it will be Rs 10 lakh for state-level Internet service providers.