Spectrum winners may have to fulfil more roll-out obligations

Telecom companies winning spectrum in the upcoming auction may have to fulfil fresh additional roll-out obligation.

The Empowered Group of Ministers on telecom has taken a view that apart from existing roll-out norms based on covering district headquarters, telecom companies should also be asked to cover up to block head quarters.

This will, however, be applicable only on those telecom firms who use shared infrastructure created from public fund.

The EGoM headed by the Home Minister, Mr P. Chidambaram, had asked the DoT to take operators feedback on the new formula and send a revised proposal for the Group’s consideration.

The EGoM is scheduled to meet tomorrow to take decision on this issue apart from determining the reserve price for the spectrum auction.

The TRAI had earlier proposed to completely overhaul the roll-out norms by basing it on habitation instead of geographical coverage. But the DoT trashed this proposal on grounds that it would be legally untenable to change roll-out norms drastically, given that most operators have already completed their existing obligation.

The DoT had instead proposed to ask operators to cover 20 per cent of block headquarters in their circles within the first two years and another 10 per cent in the third year.

Coverage beyond that will be left to the operators depending on the viability of offering services.

Under the current licence conditions, mobile operators are required to cover at least 10 per cent of the district headquarters in the first year and 50 per cent of the districts in three years.

Minutes of last EGoM

According to the Minutes of the last EGoM meeting seen by Business Line, a view has emerged that the roll-out obligation should be a mix of the two.

Wherever operators use their own infrastructure there will not be any additional roll-out conditions, but in case they are sharing towers or any of the other infrastructure, then they will have to roll-out into block headquarters as well.

But the big decision being awaited by everyone in the industry is the reserve price. The TRAI has proposed to fix the base price at Rs 18,000 crore, but the industry wants it reduced by at least 80 per cent.

Tariff

While the telecom regulator feels that the proposed base price will increase tariffs by 5-10 paise a minute, operators claim that the hike could be as much as 90 paise a minute.

The Cellular Operators’ Association of India has shot off another letter to the EGoM saying that the TRAI’s projections were unrealistic, as it had not accounted for various factors including full impact of spectrum re-farming.

>tkt@thehindu.co.in