New guidelines for telecom licences issued by the department of telecommunications (DoT) to reform the telecom industry in the wake of the 2G spectrum scandal have abolished crossholding between operators in a service area.
All service providers will have to migrate to the new licencing regime on expiry of their licences. This means that Vodafone may have to sell its 4.4% stake in Bharti Airtel, India's largest telecom service provider, when its licences come up for renewal next year.
Previous telecom licensing norms allow promoters of a telecom operator to have up to 10% equity stake in another firm in the same circle.
Under the new regime, the operators will be allowed to offer intra and inter-circle roaming but bars operations from acquiring subscribers in areas where they don't own licence.
The new scheme called Unified Licences (UL), will allow the companies to offer mobile and fixed-line services using any technology. They can also provide Internet TV services. The new licences will be valid for 20 years, and would be renewable for another 10 years.
For UL, the operators will have to pay maximum of Rs 15 crore for providing all telecom services while there are separate one-time entry fees for firms opting to provide select services like national long distances and Internet services.
Spectrum has been delinked from the licences, making any company eligible for obtaining one.
However, a separate application is required for spectrum whose price will be determined only by the market.
Earlier, all the licences for mobile services came with a 4.4 MHz of start up spectrum. This was one of the reasons why the scam in the telecom sector took place as licences were issued on a first-come-first-served basis.