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Missive missiles

After land, the airwaves seem to be the precious resource in the country. But what makes them so controversial? Rajeev Chandrasekhar’s open letter to Ratan Tata | Ratan Tata answers

delhi Updated: Dec 10, 2010 02:38 IST
Manoj Gairola

After land, the airwaves seem to be the precious resource in the country. But what makes them so controversial?

Telecom policy and licensing have been mired in controversy since the sector was opened up for private participation in 1992. Here’s a look at how telecom policy has evolved over the past two decades:

1992
Licences awarded to eight operators in four metros without auction.
Controversies: Tata Telecom challenged the award of a licence for the Mumbai circle to Bharti in court saying rules were flouted. Following a review of the awards, Bharti, which had earlier won the Mumbai circle, got Delhi and BPL was awarded Mumbai. Tata Telecom got nothing.
Main beneficiaries: Bharti, Sterling, BPL, Usha Martin, Max, Modi Telstra, RPG Cellular and Skycell
Telecom minister: Rajesh Pilot (MoS, Independent charge)
Party in power: Congress

1995
First ever auction for telecom licences for circles outside the metros. Two licences each were auctioned for 19 circles.
Controversies: Total licence fees quoted for mobile and fixed licences were about $30 billion, way above what most experts considered viable.
Main beneficiaries: Bharti, Birla AT&T, Tata, BPL, Escotel, Koshika, Reliance and Jasmine.
Telecom minister: Sukh Ram (MoS, Independent charge)
Party in power: Congress

1999
Licence winners of 1995 could not pay the licence fees they had bid and lobbied for a change .
Controversies: The NDA government came out with the New Telecom Policy 1999, which envisaged a shift from fixed licence fees to a revenue sharing regime.
Main beneficiaries: Every operator benefitted
Telecom minister: Jagmohan (till June 1999), Atal Bihari Vajpayee (June-Oct 1999) and Ram Vilas Paswan (from Oct 1999)
Alliance in power: NDA

2001
Auction for fourth licence in each circle took place (the third licence was awarded to the government-owned BSNL/MTNL).
Controversies: None
Main beneficiaries: Bharti, Idea, Essar and Escotel
Telecom minister: Ram Vilas Paswan (till Oct 2001) and Pramod Mahajan (after Oct 2001)
Alliance in power: NDA

2003
The government amended the new telecom policy NTP 1999.
Controversies: The new Unified Access Service licence allowed fixed line operators like Reliance and
Tata, who had paid far lower licence fees than cellular service operators, to offer mobile telephony. Following a legal battle by GSM operators that went up to the SC, the matter was settled out of court between the government, CDMA operators and GSM lobby. Reliance
and Tata had to pay Rs 1,650 crore as unified licence fees and the sector became technology-neutral.
Main beneficiaries: Reliance, Tata Teleservices
Telecom minister: Pramod Mahajan (till early 2003) and subsequently Arun Shourie
Alliance in power: NDA

2008
Raja awarded new licences to new players on first come first served basis.
Controversies: The cut-off date for submission of bids was arbitrarily changed and spectrum was allotted to new operators at rates decided in 2001.
Main beneficiaries: Swan (renamed Etisalat DB), Uninor, Loop Telecom, Shyam Sistema, Datacom (renamed Videocon), S Tel.
RCOM and Tata Teleservces, which offered CDMA technology till then, also benefited as they could now offer GSM
Telecom minister: A Raja
Alliance in power: UPA

Rajeev Chandrasekhar’s open letter to Ratan Tata | Tata answers