Spectrum allocation de-linked from licence

Our Bureau New Delhi | Updated on March 12, 2018 Published on August 02, 2013



telecom towers

The Telecom Department has finalised the new unified licence regime that de-links spectrum allocation from the licence.

Under the existing policy, spectrum was bundled as part of the licence. The new policy will allow companies to pick a licence for Rs 15 crore and then apply for spectrum separately. The new licence will also allow companies to offer Internet telephony services. Until now, only those players that had paid Rs 1,658 crore as entry fee were permitted to offer Net telephony. Under the new regime, Internet service providers, such as Sify, and messaging companies, such as Nimbuzz, can offer voice services by paying only Rs 15 crore.

This would drive down mobile call tariffs because Net telephony enables operators to offer even international calls at rock bottom prices.

However, those companies which have broadband spectrum, such as Reliance Jio Infotel, will still have to pay an additional Rs 1,658 crore to offer Net telephony services.

Cross holding

The new policy also does away with cross-holding norms. This means that promoters of a telecom company will not be allowed to pick up stake in another telecom company.

Under the existing policy, a telecom company is allowed to own up to 10 per cent stake in another telecom firm operating in the same circle. Vodafone, for example, holds just under five per cent in Bharti Airtel even as it runs its own operations. Vodafone had written to DoT saying that this policy should not change. In a letter, the company said that any change in the cross holding could hurt it. However, the final unified licence guidelines, seen by Business Line, bar companies from holding any equity stake in rival operators.

The new regime will also lower the barriers to services such as the Internet Protocol Television (IPTV). Under the current policy, only companies with a minimum net worth of Rs 100 crore can offer IPTV services. But the unified licence policy does away with this requirement.

Internet Protocol Television is a system by which television services are delivered using the Internet protocol suite over a packet-switched network just like other data services, instead of being delivered through traditional terrestrial, satellite signal and cable television formats. Though this was permitted in India a few years ago not many players entered this space due to the high entry fee.

Market watchers say the new licence regime will not change anything significantly in the telecom sector.


Published on August 02, 2013
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