NEW DELHI, DECEMBER 14: Telecom Regulatory Authority of India (TRAI) today suggested that revenue not retained by the Cellular Mobile Service Provider (CMSP) should not be considered for calculating revenue sharing percentage.The part of the revenue the operator pays for services like interconnectivity should not be a part of gross revenue, the consultation paper on issues relating to cellular mobile service by TRAI said.The CMSPs are supposed to migrate from the fixed licence fee structure to revenue sharing regime as proposed by the new telecom policy 99 (NTP '99).Releasing the consultation paper TRAI chairman Justice S S Sodhi said besides determining revenue share percentage, TRAI would also formulate recommendations on issues related to entry fee and entry of fourth operator, definition of revenue and implementation issues, as well as issues relating to licence conditions.TRAI has also asked comments on whether the licence conditions should be reviewed for enabling the operators' greaterflexibility, ability to compete and to ensure smoother implementation of licences.Under the migration package proposed in the NTP '99, there shall be lock-in of the present shareholding for a period of five years from the effective date of licence agreement. TRAI has sought views on whether this condition should be applicable to new entrants.One of the issue is entry fee for a new operator and whether there should be bidding procedure or the fee should be determined in advance. TRAI conducted a study by calculating the licence fee as a percentage of adjusted gross revenue with options of sharing zero, five, 10, 15, 20 and 25 per cent of the revenue.According to one of the analysis, under the 15 per cent revenue sharing arrangement, the internal rate of returns (IRRs) range from 19.2 per cent to 37.7 per centAn issue which arises in the above analysis is the level of returns that the project will need to exhibit in order to attract adequate investment.TRAI to be strengthened: PaswanNEWDELHI: Government today said it would strengthen the Telecom Regulatory Authority of India (TRAI) to make it more effective. Replying to questions in the Rajya Sabha, communications minister Ram Vilas Paswan added that the government was studying TRAI's recommendation to open up domestic long distance communications.On the controversial new telecom policy, the minister said the package to migrate from licence fee regime to a revenue-sharing formula was offered as private telcom operators were on the verge of sickness. He said the new telecom policy would give a level-playing field to operators and allow more competition in the sector.
