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Uniform revenue share for telecom sector to be imposed over 2 years

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NEW DELHI: Telecom minister Kapil Sibal's recent announcement of 8% uniform revenue share for the sector will be implemented in a phased manner over a two-year period, officials aware of the development told ET. Currently revenue share ranges from 0-10% based on a number of factors such as region and the type of service offered.
For instance, mobile phone companies share 10% of their annual sales with the government in metros and 'category A' regions such as Tamil Nadu and Gujarat. This will be reduced to 9% in the current fiscal and will subsequently be made 8% in 2013-14.

Similarly, ISPs, which are currently not covered under the revenue share regime, will have to pay 4% of their annual sales towards this levy this year, before being brought into the 8% slab in line with other services from 2013-14.
For 'Category C' areas, the levy will first be raised to 7% this year and then to 8% in the next 12 months (see table).
All mobile phone companies will be informed of the phased implementation of the uniform revenue share regime within the next few days.
"A uniform annual licence fee rate of 8% of Adjusted Gross Revenue shall be adopted across all categories of service areas in two yearly steps starting from year 2012-13 with effect from April 1, 2012," said the Telecom department internal note on this issue.
The new regime, however, does not apply to telecom tower companies. While the Telecom Commission, the highest decision making body of the communication ministry, had approved sector regulator Trai's recommendations of imposing this levy on tower firms, the department had deferred its implementation after objections from the industry.
The telecom department had decided to go in for 8% revenue share despite Trai reiterating that it stands by its recommendations that this levy be reduced gradually over the next three years to 6% allowing the industry to save about 6,500 crore in levies by 2014.


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