Clarity in Policy

For faster and effective implementation of the VSAT policy, policy-makers
should try to tie all loose-ends, so that before shifting from the license raj
to a revenue-sharing regime, service providers are made aware about what falls
under revenue-sharing.

The new VSAT policy based on revenue sharing was announced on 10 May 2001,
but there has been a very slow progress on this front even after four months.
None of the service providers has shifted to the new regime. The only good thing
that has happened is the readiness of the VSAT service providers to shift to the
revenue-sharing regime, from 1August 2001. Failure to do so would have led
service providers to the old regime of license raj, where they had to pay a huge
amount of license fee.

What was the reason for the slow movement of the revenue-sharing policy?
According to the experts, though the VSAT service providers have agreed, in
principle, to join the revenue-sharing regime, they are not happy with certain
clauses in the policy which are not clear and act as a deterrent for the shift
from the license raj to the revenue-sharing regime.

First, the VSAT service providers have multiple businesses and they also
provide Internet services to their clients as a value-added service or as a
different business unit. ISPs do not pay any license fee while the VSAT service
providers have to pay a license fee (in the new regime, they will share revenue
at the rate of 10 percent). The government should make it very clear that there
should be separate accounts for VSAT and ISP services, and also what all things
can go under each head, so that there is no dispute later due to wrong
interpretation or non-clarity in the VSAT policy. This will help in bringing
transparency in the policy, and VSAT service providers can work more towards the
development of the VSAT industry rather than worrying about the policy.

Second, the clause which says "Revenue for the purpose of levying
license fee as a percentage of revenue, shall include gross total revenue
accruing to the license by way of providing VSAT service under this license...
Note: The items listed here are only indicative and not exhaustive". The
policy-makers should ensure completion of the list, so that it is easier for the
VSAT service providers to know for what components revenue will be shared.

Third, the VSAT service providers are allowed interconnect on a case-to-case
basis, and the service provider should be informed within thirty days, but that
is not the case as VSAT service providers are informed after a very long period
(say four to six months). The policy-makers should ensure that within thirty
days, they should inform whether interconnect will be allowed or not, so that
the service providers are not kept waiting, and people can look for alternate
measures. This will

help in faster deployment of the VSAT infrastructure in the country.

All these issues if solved, will help in the signing of the license at a
faster pace by the VSAT service providers and will help in faster growth of the
VSAT industry, in the country. As presently, corporates are holding back their
decisions. Once the transition takes place, the industry will pass on the
benefits of the revenue-sharing regime to the coporates, for the benefit of all.

Pravin Prashant