Government slashes long-distance licence fees

11 Nov 2005

In a move that it hopes will attract new entrants into the telecoms market, the Indian government has drastically cut the licence fees it charges operators of national long-distance and international telephony. India had previously charged INR1 billion (USD21.88 million) to enter the national long-distance market, and INR250 million (USD5.4 million) for an international concession. Both fees will be cut to INR25 million (USD547,000), as of 1 January 2006. The annual licence fee for both services has also been slashed from 15% of annual gross revenue to 6%. The high cost of entering the market has seen only three companies establishing themselves as national long-distance providers: state-run Bharat Sanchar Nigam Ltd (BSNL), Reliance Infocomm and Bharti Tele-Ventures. Videsh Sanchar Nigam Ltd (VSNL) leads the international sector, where it faces competition from operators including Bharti and Reliance.