TRAI puts out net access wishlist

Telecom Regulatory Authority of India (TRAI) on Thursday said 60 million Indians will have internet connections by 2010, if twelve ‘&...

Telecom Regulatory Authority of India (TRAI) on Thursday said 60 million Indians will have internet connections by 2010, if twelve ‘‘comprehensive’’ recommendations including duty cuts and license fee waivers are accepted by the Centre and state governments.

By 2010, 20 million will have high speed, and 40 million slower Internet links, provided MTNL and BSNL resolve last mile issues with Internet Service Providers (ISPs), spectrum licenses cost 2 per cent less and wireless technologies like WiFi and WiMax are de-licensed, TRAI said. It also recommended subsidies and tax cuts for PCs and other internet access devices. TRAI said revenue losses to the government

would be minimal even if duties are lowered from around 30 per cent to some 5 per cent, the existing tax on cellphones.

‘‘We calculated a revenue loss of Rs 100-200 — which is nothing — because broadband internet has not grown. It is barely 0.02 per cent of all internet users, so what losses can duty cuts bring?’’ TRAI chairman Pradip Baijal said.

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TRAI’s recommendations are based on a report on ’India’s Broadband Economy’ brought out by CII and the Departments of IT and Telecom. It was prepared by IBM Business Consulting Services, India.

CII’s recommendations — which are also found in TRAI’s report — include reduction in bandwidth prices, revenue-sharing between operators and ISPS, Sujit Kumar, chairman, CII’s National Broadband Economy Committee said. However, the ISP Association of India (ISPAI), a contributor to the TRAI study, said it was expecting more concrete steps from the regulator. ‘‘Crucial aspects have not been touched upon by TRAI,’’ said ISPAI secretary Amitabh Singhal.

TRAI’s recommendations include a waiver of service tax on ISPs for five years, which will require a central legislation and reduce costs by 8 pc. It has also recommended promotion of broadband penetration by hosting Internet content in local servers and taxing them 50 per cent less the next five years.

The Centre should also ask states to waive sales tax on e-commerce for 5 years and follow it with a legislation, TRAI has said. TRAI also said corporations should be allowed to give a Rs. 6000 annual non-taxable allowance to employees for broadband access at homes.