24 January, 2021

Ntp For Dummies

In India, telecom news equals bad news. First we had Sukh Ram's excesses, then Jagmohan who dealt with businessmen the same way he did with Kashmir militants and now the controversy over the New Telecom Policy (NTP), kicked off by the President of In

Ntp For Dummies

Who does the telecom policy benefit?
First, the government. Under the original agreement, private operators have to pay a flat licence fee every year to the government. In most cases, the fee has turned out to be far higher than the operator's earnings. Cellular operators ran up a Rs 1,187-crore loss last year, roughly equal to the industry's turnover of Rs 1,301 crore. Of this, only Rs 596 crore came from state circles (as opposed to metro circles) which owe the government nearly the entire Rs 2,583 crore in licence fees. If the losses had kept mounting, there was no way the industry could have paid future dues. By improving the commercial environment, the government has ensured that at least the overdue fee comes in during the year. Future inflows for the government are assured because under the NTP, operators pay a percentage of their revenues instead of the flat licence fee. Plus, the government earns revenue from six other streams: spectrum charges, import duties on equipment and hand sets, interconnect charges, service tax and corporate tax. Last year, it...



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