After a notice has been circulated to some of the MSOs by DoT to pay internet service provider (ISP) licence fee on not just the broadband revenue, but also the MSO business revenue, the newly formed MSO association, All India Digital Cable Federation (AIDCF) has requested the Ministry of Information & Broadcasting (MIB) and the Department of Telecom (DoT) to remove the 8 per cent adjusted gross revenue (AGR) applicable for MSOs offering broadband services.
The federation said that the licence fee of 8 per cent of the AGR is a large levy on the MSOs, especially when they are investing in acquiring right of way (RoW) costs as well. It added that the removal of 8 per cent tax on the AGR improves the payback period to 6–7 years, thereby making the sector attractive for investors and bringing in the huge investments needed for high-speed internet to take off.
“The ISP licence has a provision that you have to pay 8 per cent on AGR on broadband. Since MSOs earn revenue from various sources, in some cases they (DoT) have charged 8 per cent on total revenue in absence of clarification”, said Ortel Communications president and CEO Bibhu Prasad Rath.
Apart from this, the federation also requested the government to support MSOs for right of way and protection of infrastructure laid on ground. MSOs offering broadband services feel that the pole charges levied by some states are huge.
It also insisted that the Government should rationalise import duties on network equipment. While the Government has plans for ‘Digital India’ and ‘Make in India’, there are still certain infrastructure related products which are not being manufactured in the country, and hence have to be imported. The association has thus asked the Government to rationalise the import duties being charged on these goods, until someone from the country starts manufacturing them.
In another recommendation AIDCF has requested the Government to provide infrastructure status to the cable broadband network. With the infrastructure status, MSOs will become eligible for easy bank financing, in addition to overseas fund raising to expand their broadband base.
It also requested the government to allow use of Universal Service Obligation (USO) fund for wireline network rollout in the country.