'Lower the licence fee for telcos buying Indian equipment'

The planning Commission has said that a reduction in annual licence fees for telecom operators who procure domestically produced equipment for their networks will boost manufacturing in the country.

“Decrease in licence fee for operators for procuring Indian products and Indian manufactured products (IMP) will support telecom equipment manufacturing,” the 12th Five Year Plan (2012-17) document said.

The government has decided to charge 8 per cent of gross revenue as licence fee from all telecom service providers across all categories and services from 2013-14.

At present, DoT charges licence fee in the range of 6-10 per cent depending upon the type of service and the circle.

According to Trai, only 12-13 per cent of all the locally made products, produced with the aid of foreign vendors in 2009-10, were used in the sector. However, purely India-made products formed just 3 per cent of the total market.

The regulator defined IMP as those products and equipments where Intellectual Property Rights resides outside India. For the Indian Products, IPRs resides within the country.

The 12th Five Year Plan has decided to set a target to achieve increase use of domestically made products – to the tune of 60 per cent in the telecom network, with 50 per cent value addition from indigenous companies.

Local value addition would mean that the 50 per cent content or component in the product should be from purely Indian companies.

Though some companies make telecom equipment and products in the country, most of their parts, mainly components, are imported.

PTI