DoT has levied a fee of 5 per cent of gross annual revenue on Afro Asian Communications (ASC), while its competitor Iridium is being charged 16 per cent of the gross annual revenue.

DoT had, in 1995, offered a provisional licence agreement for providing satellite mobile telephone service to ASC, which was required to provide the service through its Agrani satellite and install and offer services within 36 months of the effective date.

This is in direct contrast to IITL, which was given a provisional licence for running the service just a day before the global launch of the service on November 1, 1998, and was asked to install and offer services within six months of the effective date.

A snap shot of the variationsin some of the salient clauses/conditions proposed by DoT in the provisional license agreements reveals that Ascon was asked to pay a licence fee of Rs 1 crore plus 5 per cent of gross turnover resulting from the operation of services in India per annum excluding the PSTN/PSDN/Telex utilisation charge paid to DoT by the licensee.

In contrast, Iridium has to pay a license fee consisting of Rs 1 crore per annum and a variable component equal to 16 per cent of the gross revenue generated form the services per annum.

In addition, there are differences between the licence period of ASC and IITL. Ascon has been granted the licence for 13 years, extendable for another 13 years at one time at the discretion of DoT. Iridium, in comparison, has been granted a licence for 10 years, with extension for one year or more at one time on request made by the licensee, latest by the ninth year.

The Trai consultation paper on the global mobile personal communication services (GMPCS) also reveals that India has the highestlicence fee for GMPCS in comparison to the US, Italy, Thailand, Russia, and Japan.

This emerges from the annual licence fee being charged on Iridium, the sole GMPCS service provider in the world today. While the US charges $9,300 per annum from Iridium, Italy charges $13,200, Thailand $8,400, Russia $79,000 and Japan $1,400.

In comparison, DoT has levied an annual licene fee of $250,000 plus a 16 per cent share of the annual gross revenue as per the provisional licence agreement signed by IITL with DoT.