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Journalism of Courage
New Delhi, Sept 5: Union Communications Minister Ram Vilas Paswan announced on Tuesday that the Government has decided to allow unrestricted entry into the basic telecom services segment.
According to Paswan, the government has accepted the recommendations of the Telecom Regulatory Authority of India TRAI to open up the sector to unlimited number of players, who will be given licences on the basis of a one-time entry fee, bank guarantee and revenue share as the licence fee. Paswan, however, declined to divulge further details and said that the modalities of the policy for fixed service providers FSPs will be finalised by next month.
For the existing six players, the TRAI has recommended that licence fee due under the earlier arrangement up to the date of migration, that is July 31, 1997, should be reckoned as their entry fee. However, for the new operators, in these circles, TRAI has recommended that the basis for payment of entry fee shall be the same as that in the other 15 circles.
This means that while Hughes Tele.com in Maharashtra, pays Rs 795 crore as entry fee, the new operator pays only Rs 115 crore. Similarly, in Andhra Pradesh, Tata TeleServices will have to shell out Rs 241 crore as entry fee, the new player gets away with Rs 35 crore. Reliance in Gujarat will pay Rs 195 crore, while the new entrant in that circle has to pay only Rs 40 crore. Essar Commvision Limited Punjab will end up paying Rs 265 crore as licence fee, while the new entrant in Punjab, pays only Rs 20 crore. In Rajasthan, while Shyam Telecom will pay Rs 160 crore, the recommendations suggest an entry fee of Rs 20 crore for the new entrant.
In Madhya Pradesh, Bharti Tele Services, will pay Rs 38 crore as licence fee, the new entrant will pay Rs 20 crore. Interestingly, while the first five are upset of the huge difference in the entry fee to be paid by them versus the new entrants, Bharti, which does not suffer much disparity in terms of entry fee is also miffed.
The bone of contention is the clause which envisages waiver in revenue share for four years, from August 1999 onwards, for those players in the circles, where the disparity between the entry fee paid by the existing operators and the new licencees will be more than Rs 100 crore. Since Bharti is the only case, where the difference at Rs 18 crore is less than the said amount, it does not get the benefit of this waiver. quot;The recommendations are unfair to players who quoted reasonable licence fees in the first place and rolled out their services in time,quot; says a senior Bharti official.
However, the other telecom players, planning to enter these six circles, are happy at today8217;s announcement and insist that the disparity in entry fee, will help establish a level playing field for the new entrants, as the existing players have a two-year lead over the new comers.
Meanwhile, the existing and wannabe basic operators want more than just unrestricted entry. quot;The Government should allow us to give mobile handsets, which cost Rs 6,000 a peice, to our subscribers, instead of Fixed Wireless Terminals FWTs, which come at an exorbitant cost of Rs 20,000 per terminal. Besides, FWTs are very cumbersome,quot; says an industry expert.
quot;If the Government was to allow us handheld devices, we would have been able to reach many more than the 30 villages, we have been able to reach so far,quot; adds Melhotra.
