India cuts domestic, overseas telecom licence fees

NEW DELHI (Reuters) - India has cut the entry fee for national long-distance telecom services to 25 million rupees from one billion rupees to reduce costs and facilitate growth in the sector, Telecoms Minister Dayanidhi Maran said.

Maran said on Thursday the entry fee for international long-distance services had also been cut to 25 million rupees from 250 million rupees.

He said the annual licence fee for both services had been reduced to six percent of annual gross revenue from 15 percent.

The new regime comes into effect from 1 January 2006.

"Our idea is to encourage more players in the field. The tariff will definitely reduce," Maran told reporters.

At the moment, India enjoys some of the cheapest local call rates but tariffs on overseas calls and domestic long-distance calls are high because of higher start-up costs for operators.

Maran said he expected more players, some of them foreign, to enter the booming telecoms market.

"I expect, by next year, the number of players will triple and I will not be surprised if it quadruples."

At the moment, India has three integrated carriers who offer national long-distance services. They are state-run Bharat Sanchar Nigam Ltd, Reliance Infocomm Ltd and Bharti Tele-Ventures Ltd.

Maran said he expected international bandwidth prices to come down because of the Thursday's announcement, which will further boost India's booming backoffice industry.