The Prime Minister’s Office has asked the Department of Telecommunications (DoT) to review its decision to impose licence fee on internet service providers (ISPs). 

Under the new unified licensing regime, the department has proposed levying a licence fee of eight per cent on the adjusted gross revenues of ISPs. At present, ISPs do not pay any revenue share to the government.

The Internet Service Providers Association of India (ISPAI) have opposed DoT’s decision on the ground that internet penetration in the country is still low and imposing a fee would be detrimental to the government’s plan to deliver broadband to masses.

According to ISPAI, charging a licence fee on pure internet services may be counter-productive since all charges will ultimately have to be borne by end-subscribers. Currently, companies with the ISP licence are allowed to deduct revenues from pure internet services while calculating the licence fee payable to the government. Pure internet services refer to providing both internet access and content to users excluding voice services.

However, internet services provided by telecom players on 3G and 4G network falls under the purview of the licence fee. Mobile operators, therefore, have been requesting the government to end this discrepancy to ensure a level playing field by imposing licence fee on ISPs as well.