New Delhi: Government today (Dec 24, 2003) announced fresh concessions for telecom players at a cost of Rs 968 crore while singling out cellular operators for additional benefits in view of the heavy licence fee paid by them.

Offering a two per cent revenue cut for telecom operators under all categories, Government gave an additional two per cent cut in revenue share for cellular operators, who in turn announced withdrawal of their case in the Supreme Court against the WLL (Wireless in Local Loop) services by basic operators.

Announcing the package, Communications Minister Arun Shourie told reporters the Government would reduce its revenue share by two per cent across the board for operators in cellular, basic and unified categories and this would cost it Rs 885 crore annually.

In the case of first and second cellular licence holders in a circle, the cut in revenue share would work out to four per cent and the additional benefit to this category would cost the Government Rs 83 crore annually.

Besides, the Government would soon increase the ceiling of foreign investment in the telecom sector to 74 per cent from 49 per cent now, Shourie said.

The increase in foreign investment, seen beneficial particularly to the cellular operators, would be by allowing additional investment from foreign institutional investors (FII) while Foreign Direct Investment (FDI) would be capped at 49 per cent.

Shourie said the Finance Ministry would approach the Cabinet for approval to hike the investment limit to 74 per cent from 49 per cent now on the basis of recommendations by the Department of Telecom.