Licensing norms tougher in India’s new telecom policy

NEW DELHI - India Saturday said its new telecom policy to be unveiled soon will tighten the norms for grant of licences and airwaves to service providers in a bid to induce transparency and provide a level-playing field to new and existing players.

Announcing this at a hurriedly convened press conference here, Communications Minister Kapil Sibal also said more notices will be issued to companies that had failed to roll out their services as contracted to explain why their licences should not be annulled.

“We’ve reached a stage where the objectives of the existing policy has been well served. Every circle has 12-14 competitors. Tele-density has reached almost 62 percent. Now the broad contours of the policy needs a directional shift,” Sibal said.

“It also is necessary to ensure a level-playing field for all players. Going forward, any new policy on pricing would need to be applied equally to all players,” said the minister, ruling out first-cum-first served basis for award of spectrum in future.

He also said the new policy will have the following salient features:

-It will de-link the award of spectrum from issue of licences

-Spectrum henceforth will be awarded only on a market-based mechanism

-Adequate spectrum will be provided to all service providers

-Valid licences will be issued for 1.8 megahertz spectrum at a price determined under the new policy

Sibal also said that showcause notices have been issued to certain licences for cancellation. Only the licences that will be found valid will be assigned additional 1.8 megahertz spectrum but it will be assigned to them under the new policy.

“If the licences are upheld then we cannot do anything about it, whatever extra has been given will be under the new policy,” he said.

The minister also advocated the need for adoption of an auction process for allocation and pricing of spectrum beyond 6.2 megaheartz while ensuring that there is adequate competition in the auction process.

Sibal said responses have been sought from the industry watchdog, Telecom Regulatory Authority of India (TRA), on these issues and the policy would be announced within the 100-day deadline he had set for himself when he assumed charge in November.

The remarks come against the backdrop of opposition parties and a petition in the apex court alleging a large-scale scam in the award of spectrum for second generation (2G) telecom services since 2006, prompting government action against some 11 companies.

Sibal has also been under attack by the apex court and the opposition for his remarks that the official auditor was “utterly erroneous” in assessing the loss on award of second generation (2G) telecom spectrum at Rs.1.76 lakh crore ($40 billion) in 2008.

The government’s missive to new telecom companies notwithstanding, the Supreme Court had also issued notices to 11 companies, asking why their licences should not be anulled for not complying with the conditions, including time-bound roll out of service obligations.

The companies that have been issued notices are: Etisalat, S-Tel, Uninor, Loop Telecom, Videocon, Allianz Infra, Idea Cellular, Tata Teleservices, Sistema Shyam Teleservices, Dishnet Wireless and Vodafone-Essar.