According to a draft note prepared by the department of telecom for the telecom commission, "financially, other things remaining constant, the reduction in license fee for STD/ISD and commercial V-SAT services, from 15 and 10 per cent to a common level of six per cent is expected to impact the revenues of the government by about Rs 500 crore."
The DoT has proposed to reduce the license fee as well as entry fee for new entrants in the segment and this had created a controversy over compensation of over Rs 2,800 crore (Rs 28 billion) demanded by three existing players namely Bharti, Reliance and VSNL.
In his observations on the proposal, member (finance) of DoT said, "There will be a significant indirect financial impact also, since the access service licensees shall begin diverting even their intra-circle traffic to their own divisions holding STD license, so as to benefit them from the license fee differentials."
On the issue of diluting roll out obligations, the member said all license holders need to be held accountable by the government for actual and proper contribution to the growth of telecom network in their service areas, particularly as each license means a commitment of the scarce national resource of wireless spectrum.