The government on Wednesday unveiled a new telecom policy regime for second generation cellular telephony (2G) services that de-links licences from spectrum, shifts spectrum sale to auctions and imposes a uniform revenue-share fee of 8% across all circles instead of the varying zone-based 6% to 10% at present.
Communications minister Kapil Sibal announced the policy that also enables automatic approval for mergers and acquisitions where the new combined entity has a market share of less than 35%.
However, in a major relief to incumbent operators on pricing of spectrum beyond their startup quota of 6.2 Mhz, Sibal said any announcement on pricing of spectrum will be made later after studying the recent Supreme Court verdict on cancellation of licences of new operators. This came as a breather for the old operators who are sitting on spectrum far beyond the 6.2 MHz without paying any charges.
In order to implement the policy, the Telecom Regulatory authority of India (TRAI) will now give its recommendations on the migration of existing operators to the new regime.
There will also be a minimum presumptive gross revenue for calculation of licence fees and existing licences will be renewed only for 10 years.On extension, the UAS (universal access service) licencee will be required to pay a fee which will be Rs 2 crore for metros and ‘A’ circles, s. 1 crore for ‘B’ circles and Rs 0.5 crore for ‘C’ circles. This fee does not cover the value of spectrum.
“The licencee can acquire additional spectrum beyond prescribed limits, in the open market, should there be an auction of spectrum subject to the limits prescribed for merger of licences,” said Sibal.
The new policy allows operators to share spectrum in the same service area. A simple automatic approval process will be put in place. Initially, the government will give permission for sharing of spectrum for five years.
“In respect of spectrum obtained through auction, spectrum sharing will be permitted only if the auction conditions provide for the same. Parties sharing the spectrum will be deemed to be sharing their entire spectrum for the purpose of charging,” said Sibal.
“Allowing sharing of spectrum is also a step in the right direction,” Bharti Airtel said.