Spectrum unbundled: Govt to delink licences from airwaves

The government said it would begin to move towards issuing licences without any attached spectrum to mobile-service providers that would allow operators to function across the country with a single permit

Written by ENS Economic Bureau | New Delhi | Published:February 16, 2012 12:40 am

The government on Wednesday said it would begin to move towards issuing licences without any attached spectrum to mobile-service providers that would allow operators to function across the country with a single permit.

The government will decide how to put the new policy regime in place,minister of communications and IT Kapil Sibal told a press conference.

“How the licensing regime will be implemented will be decided by us…. If auctions are held,licences will be given and will be subject to the migration package,” he said. The Telecom Regulatory Authority of India (TRAI) will issue recommendations on how the government will implement the new policy. Under earlier rules,operators’ Universal Access Service (UAS) licences came bundled with 4.4 MHz in airwaves.

In its judgment on February 2,the Supreme Court (SC) ruled that the government must separate the allocation of spectrum from the grant of permits. The draft National Telecom Policy,issued in October 2011,also prescribes the measure.

“In the event of any auction of spectrum pending finalisation of the Unified Licensing Regime,UAS licence without spectrum may be issued which could be subject to a requirement to migrate to Unified licence as and when the regime is put in place,” the Department of Telecommunications said in a release.

Buyers of licences will have to pay the government Rs 2 crore in the lucrative ‘A’ circles,Rs 1 crore in ‘B’ circles and Rs 50 lakh in ‘C’ service areas. Under earlier rules,operators paid the government Rs 1,650 crore for licences bundled with spectrum.

Operators will also pay a uniform licence fee of 8 per cent of adjusted gross revenue beginning from the next financial year. The fee and the spectrum use charges will be payable on actual average gross revenue,subject to a “minimum average gross revenue” presumed by the DoT.

The government has also increased its limit on bandwidth assigned to service providers to 8 MHz for GSM technologies and 5 MHz for CDMA operators. In Delhi and Mumbai,the new limits are 10 MHz and 6.25 MHz respectively. “Licencees can acquire spectrum beyond these limits according to the market mechanism,” Sibal said.

Earlier,the government capped spectrum at 4.4 MHz for entrants and 6.2 MHz for larger operators. The DoT will also allow mergers of service providers that between them make up no more than 35 per cent of industry subscribers and revenue. It will consider,with recommendations from TRAI,mergers between companies that have combined market shares more than 35 per cent and together hold no more than 25 per cent of spectrum in a service area.

The government has also accepted “in principle” the need to refarm spectrum from some government departments,Sibal said. The DoT will decide on spectrum pricing and the rules of the new 2G auction after assessing the implications of the SC judgment.

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