The government hopes this will result in higher subscription of broadband connections. It has already been approved of, by the Digital Communications Commission (DCC) — the apex decision making body in the
At present, the wireline customer base is abysmally low at 2 per cent. With this proposal, the Centre hopes for a sharp uptick.
Experts believe that if India focusses on increasing its broadband user base, it could lead to an increase in the gross domestic product (GDP). For instance, if the tele-density is 10, the GDP is 1 per cent and for every 10 per cent rise in tele-density, GDP rises by 1 per cent.
The Centre also hopes a robust broadband network will drive digital penetration and, in turn, higher revenue for the exchequer in the form of higher GST. These services attract a GST rate
of 18 per cent.
“This has two revenue channels for the government — licence fees and GST,” the official added.
The telecom market in the country is worth Rs 2.5 trillion, of which the wireline and enterprise business together account for Rs 1 trillion and mobile services account for the remainder.