Trai asks DoT to cut entry fee, merge bank guarantees
The regulatory body believes the reductions in entry fee will lead to the entry of new service providers in the market, increase investment and enhance competition in the sector.
NEW DELHI: The Telecom Regulatory Authority of India (Trai) on Tuesday asked the Department of Telecommunication (DoT) to reduce entry fees across various licence authorisation and the merging of bank guarantees (BG) to attract more players and investment in telecom sector.
The regulatory body believes the reductions in entry fee will lead to the entry of new service providers in the market, increase investment and enhance competition in the sector. “Similarly, the merging of bank guarantees will encourage ease of doing business and enable licencees to make investments in the sector, thereby ushering growth in the sector.”
“The department is of the view that the entry fees should be reduced and made uniform across all authorisations. In case of bank guarantees (BGs), both financial bank guarantee (FBG) and performance bank guarantee (PBG) should be merged and an amount of single BG may be prescribed for each authorisation… Both these measures will improve the quality of service and enhance consumer welfare,” said the Trai.
As per Trai, the entry fee for access service (UL-VNO) should be reduced from Rs 50 lakh per telecom circle/metro (Rs 25 lakh for J&K and North east) to Rs 12.5 lakh per telecom circle/metro ( Rs 6.25 lakh for J&K and North east). The authority also recommends that for licenses or authorizations other than UL and UL (VNO), the Entry fee should be levied only at the time of entry and not at the time of renewal of licence.