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Cabinet okays unified licence

Unified licences will start being issued within a fortnight, but it will take six months for WLL operators to provide full mobility.

business Updated: Oct 31, 2003 23:43 IST

The Union Cabinet on Friday approved a proposal to introduce a unified licence regime in the telecom sector, allowing wireless-in-local-loop (WLL) operators to offer fully mobile services. Those who take the unified licence will now be able to offer mobile and fixed-line services.

A Group of Ministers headed by Finance Minister Jaswant Singh had on Thursday cleared proposals for the introduction of unified licences.

Announcing the decision taken by the Cabinet, Communications Minister Arun Shourie said, “This will spur growth in the telecom sector.”

Unified licences will start being issued within a fortnight, but it will take six months for WLL operators to provide full mobility.

The biggest beneficiaries of this decision will be Reliance Infocomm and Tata Teleservices.

But since Reliance was found to have violated the conditions of its limited mobility licence, it will have to pay a penalty. The total amount the company will have to pay to get a unified licence is Rs 1,581 crore.

The Cabinet also decided that a notice would be issued to Reliance Infocomm on Saturday seeking an explanation for violations committed since 2001. The company will be given 30 days to respond. If it does not do so, its licence will be terminated.

But this procedure is a formality since Reliance Infocomm will be able to acquire a unified licence well before the deadline.

Shourie said the issue of compensating cellular operators who would be affected by the Cabinet decision would be considered by the Finance Minister.

The Cabinet has also cleared the passage of an ordinance to start a Universal Services Obligation Fund. The fund will be used to spread rural telephony.

The Cabinet passed a slew of other decisions on the telecom sector, but deferred a proposal to hike the limit of foreign direct investment in the telecom sector from 49 per cent to 74 per cent.

Jaswant Singh will consider the proposed hike in consultation with the telecom and home ministries.

Room to roam

Decision Unified licence regime

Implications Operators can offer full mobility (both WLL and GSM). Technology won’t be an issue

Top gainers WLL service providers; 6 million subscribers; operators who have licences for a large number of circles

Decision Mergers/acquisitions within circles allowed

Implications For instance, Airtel and Hutch can merge in Delhi. Or one can buy the other. Shake-out likely: fewer players will survive

Top gainers Operators who aim to deal in volumes; operators who have money to spare

Decision Release of additional spectrum after TRAI frames policy

Implications Fewer interrupted conversations, network busy signals

Top gainers Subscribers. India will have 100 million by end 2005

First Published: Oct 31, 2003 20:10 IST