Telecom bid norms in offing

NEW DELHI, Aug 18: The Telecom Commission is likely to finalise a package of relaxations for basic service operators as well as define the broad norms for the next round of bidding for basic services. The issues are likely to be decided at the full Telecom Commission’s meeting scheduled for tomorrow.

The Department of Telecommunications (DoT) has proposed that basic service operators who are facing problems in fulfilling their rural telephone obligations comprising 15 per cent of their total network could pass on their obligations to the DoT for a mutually agreed compensation. The DoT would then set up the rural networks for the private operator. The full Telecom Commission consists of part time members including the finance secretary, industry secretary, member secretary of the Planning Commission, secretary of the Department of Electronics apart from the full time members of the Telecom Commission – the telecom secretary and three member of the DoT – services, production, technical. The DoT has alsoproposed that the minimum 10 per cent foreign equity clause in the original licence agreement for a minimum of three years be relaxed as several companies have been stuck as foreign partners have decided to quit the Indian scene. Further, the lock-in for three years before any equity changes can be made between the original promoters for the company. It is also proposed that the networth clause be dropped completely. The DoT may also allow companies having won more than one circle to merge for funding both the circles.

The DoT may also propose non-remunerative circles to be clubbed together along with allowing the company to also set up other services like cellular services in these circles. The DoT is also likely to increase the weightage of indigenisation offered by companies while evaluating the bids. They have also proposed that a minimum 10 per cent foreign equity norm earlier necessary be now dropped . The DoT has also proposed easing the liquidated damages for cellular companies in circles whereoperators have been unable to fulfill the target for coverage of districts in the circle.Proposed norms for next round of bidding

Revenue sharing between operators and government to be allowed

Non-remunerative circles like NE to be clubbed with other circles

Operators in these circles to be allowed composite package of basic and cellular services to improve viability of projects

No foreign equity mandatory for bidding for circles

Minimum networth clause for companies to be dropped

Relaxations for existing /basic service operators

Lock-in period of 3 years for equity changes to be dropped

Minimum 10 per cent foreign equity to be dropped

Private companies to be allowed to pass on rural network obligation to DoT for an agreed compensation