Telecom operators may get a two percentage point rebate on license fee levy, in lieu of building more expensive but environment friendly telecom towers, according to two top executives aware of the development.
The Department of Telecommunications (DoT) is considering lowering the levy from the currently 8% of adjusted gross revenue, DoT said. “Incentivising green energy initiatives by telcos was discussed recently at an internal DoT meeting, and one of the options suggested was offering licence fee relief to cross-subsidise telecom operator investments since the cost of harnessing green power is prohibitive in the initial years,”.DoT also discussed about the approvals from the Planning Commission and the Department of Economic Affairs (DEA) to provide relief to mobile phone companies will be needed, since “the capex needed to shift to renewable energy is formidable until economies of scale are achieved.
The DoT, however, has ruled out any USOF subsidy for the proposed green energy initiatives by telcos, despite the fact that mobile phone companies contribute 5% of their annual revenue to the USOF corpus. Telcos pay roughly Rs 10,000-to-11,000 crore as annual licence fee and a 2% rebate would reduce such payout by Rs 2,000 crore. “This money can be used by telcos to run close to 66,000 mobile towers on renewable energy,”
At present, the cost of powering each mobile tower with renewable energy is roughly Rs 10 lakh and the viability gap funding required is roughly 30% or Rs 3 lakh per tower. Accordingly, “a Rs 2,000 crore reduction in annual licence fee payout can help meet the viability gap funding for running as many as 66,000 mobile towers on renewable energy.
The discussion on incentivising green energy initiatives was triggered by the telecom department’s refusal to ease the targets on using green energy to power mobile towers by 2015. The department has mandated mobile phone companies to run 50% of all cell towers in rural zones and 20% in urban zones with hybrid power, using a mix of grid support and renewable energy like solar to reduce carbon emissions by 8%. At present, there are over 4,00,000 mobile towers across India and barely 4000-odd run on a hybrid solution of diesel with a solar back-up facility.