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Updated: Why Has Airtel Increased Broadband Tariff?

Update: Airtel informs that the tariff hike is in the range of Rs 50 to Rs 150. It also informs that the government will now levy a 7% annual license fee on UASL licensees for providing internet services. Previously, the licensees were not paying any license fee for internet services.

Airtel is informing its Broadband (DSL) customers via SMS that it is increasing the monthly rental for the service due to regulatory changes and increased input costs. It has also communicated the same message via a webpage. While the new tariffs have not been updated by Airtel on its website, users have reported a hike of Rs 150 in the monthly rental.

Airtel’s decision follows the Indian Government’s decision to levy a 4% license fee on ISPs’ gross annual revenues, starting 1st July 2012, which might be increased to 8% by next year. However, the move had been challenged by The Internet Service Providers Association of India (ISPAI) in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

Also, we’re not sure if the license fee is applicable to Airtel as it has a Universal Access Services License and not just an ISP license. The Licence Fee for UASL licensees is 10%, 8% & 6% of Adjusted Gross Revenue (AGR) for Metro and Category `A’, Category `B’ and Category `C’ service areas respectively. Update: This was being charged only on voice services.

Airtel’s Telemedia Revenues: Airtel’s Telemedia business is floundering – the revenues have been flat quarter on quarter at Rs 944.2 million vs Rs 945.7 million, in this quarter, despite an increase in ARPU to Rs 962 from Rs 933.  Airtel reported its broadband (DSL) customer base at 1.371 million.


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