Financial Daily from THE HINDU group of publications
Tuesday, Oct 28, 2003
Info-Tech - Telecommunications
TRAI proposes single licence Reliance required to pay Rs 1,581 cr, Tatas Rs 545 cr
New Delhi , Oct. 27
THE Telecom Regulatory Authority of India (TRAI) has recommended a single licence for cellular and basic service operations (including limited mobility) even as it has suggested a six-month time frame to replace the existing licence regime with unified licensing through an automatic process for all telecom services.
Speaking at a press conference to announce the recommendations which have been submitted to the Department of Telecommunciations, the TRAI Chairman, Mr Pradip Baijal, noted that the objective of the unified licence regime is to be achieved in a two-stage process with the unified access regime for basic and cellular services in the first phase, to be followed by a process to define the guidelines and rules for fully unified license / authorisation regime. The charge for spectrum shall be determined separately, he noted.
Pointing out that the choice of area under the unified license would be left to the operator, Mr Baijal stated that the existing operators would have an option to continue under the present licensing regime (with present terms & conditions) or migrate to new unified access licensing regime in the existing circles. The license fee, service area, rollout obligations and performance bank guarantee under the new regime will be same as for existing cellular service providers.
The TRAI has recommended that for migrating to the new regime, basic operators will have to pay an entry fee equal to the amount paid by the fourth cellular operator, after deducting the entry fee paid as basic operators while no additional entry fee should be charged from cellular operators. Also, no extra entry fee will be paid by the existing basic operators where no fourth cellular operator had bid despite repeated attempts.
In other words, operators such as Reliance Infocomm and Tata Teleservcies Ltd, who want to convert their limited mobility services to a fully mobile service, would have to cough up an additional entry fee to migrate to this new licence.
The total cost to Reliance, which offers limited mobility services in 17 circles across the country, would work out to Rs 1,096 crore if it were to take up a cellular licence, after adjusting for its basic licence entry fees, bank guarantees and rollout obligations. Similarly, Tata Tele would have to pay Rs 545 crore to convert its basic licence into a unified licence in the five circles of operation.
Over and above, the Authority has also recommended a penalty charge of Rs 485 crore to be levied on Reliance for offering multiple registration and call-forwarding facilities to its limited mobility subscribers
"TRAI considers that Reliance Infocomm, one of the basic service operators, has been offering network services almost like an unlimited mobility service by using techniques such as multiple registration, call-forwarding. Thus, Reliance Infocomm should pay a penal interest as per the conditions laid down in Cellular Mobile Service Agreement from the date of signing their existing BSOs agreement till the date of migration to unified access licensing regime," the Authority has stated.
TRAI has stated that to bring about a level playing field, as sought by the Telecom Dispute Settlement Appellate Tribunal, the limited mobility operators will have to shell out additional entry fees. While Reliance has to shell out Rs 220 crore, Tata's have to pay Rs 129 crore. This fee has not being imposed in Circles where basic service operators initially paid high entry fee. What is more, operators such as Bharti will not have to pay any additional entry fee since it does not offer limited mobility services.
The TRAI has suggested an additional entry fee of Rs 69.75 crore in Delhi, Rs 55.81 crore in Tamil Nadu including Chennai, Rs 44.80 crore in Maharashtra including Mumbai, Rs 19.03 crore in Punjab, Rs 3.6 crore in Karnataka and Rs 28.07 crore for West Bengal including Kolkatta, No additional entry fee is proposed for other Circles.
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