Reliance Industries-backed Infotel Broadband may have to cough up Rs 1,650 crore more if it wants to offer voice services on top of its broadband spectrum. A committee constituted by the Department of Telecom set up to look into issues around the proposed unified licensing regime is likely to suggest an entry fee for Internet Service Providers for migrating to the new licensing scheme.

ISP licence

Infotel Broadband had taken an ISP licence in 2010, while buying the broadband spectrum through an auction. At that time, the Department of Telecom had said companies buying spectrum will be bound by the terms of licence they take when it comes to the scope of services. Since an ISP licence does not permit voice service, RIL could not offer this service under the existing rules.

However, under the new unified licence regime, operators will be permitted to offer all types of services. This licence is de-linked from spectrum and will be available for Rs 50 crore.

The question arose whether RIL should be allowed to offer services after converting its ISP licence to a unified licence by paying the Rs 50 crore entry fee. This was opposed by existing mobile players on grounds that they were made to pay Rs 1650 crore for taking a unified access licence.

According to the Cellular Operators Association of India (COAI), Reliance backed-Infotel Broadband had the option of taking a unified access licence in 2010 by paying an additional Rs 1,650 crore, which would have allowed it to offer voice services. But the company chose to pick an ISP licence by paying just Rs 30 lakh, with the knowledge that the licence did not permit telephony service. “Introduction of unified licence should not be allowed to be used as a via media to side-step the explicit condition of auction and attain a backdoor entry into voice services,” the COAI had said.

On the other hand, TRAI had argued that there was no case for any additional fee on broadband companies for migrating to the new unified licence regime. It was argued that the Rs 1,650-crore entry fee for unified access licence was bundled with 4.4 Mhz of GSM spectrum, which was not the case under the new policy which has clearly de-linked spectrum from the licence.

Draft report of DoT committee

According to a draft report of the DoT committee, seen by Business Line, the panel has taken a view that while there was no bar on broadband companies from migrating to the unified licence, they must be asked to pay an entry fee if they wanted to offer voice services. Once the panel finalises its report, it will be sent to the Telecom Commission for a decision.

(This article was published on February 14, 2013)
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