India's Department of Telecom is looking to provide a 10 year tax holiday for telecom companies investing in rolling out infrastructure for broadband services, reports The Hindu. It has been recommended by the DoT to the Ministry of Finance, for the upcoming Budget (2013-14). While this will help reduce the cost, we don't it will encourage competition in a largely dormant Indian ISP ecosystem. There are a few points to consider: - The cost of providing Internet services has actually increased for Internet Service Providers (ISPs), ever since the Indian government increased the license fee for ISPs to 8% of revenues. Around 500 ISPs have shut down and surrendered their licenses. The ISPAI President Rajesh Chharia had told MediaNama that policy is biased against Independent ISPs. MediaNama readers may recall that Tikona Digital Networks had shut down operations in 13 of 38 cities last month, while Qualcomm had received its ISP license in March 2012, after a 18-month delay. Reliance Industries, yet to launch services through Infotel, will benefit if this policy is implemented, since it is planning a massive 4G services rollout. - Indian law is particularly harsh on cybercafes, with increased monitoring and bureaucracy, harassment by the policy, which has led to cybercafes shutting down of Cybercafes, and hence a decrease in public infrastructure for Internet Access. There was a time when Internet Access was available publicly for Rs 10 per hour. Now it's hard to spot a cybercafe. - Right of Way is the biggest cost, and…
