The Department of Telecom (DoT) and Telecom Regulatory Authority of India (TRAI), the telecom regulators once again raised the sword against each other on the issue of extending the licence tenure of existing service providers. DoT wants to ask fresh licence fee to the existing mobile players for their licence renewal while TRAI is opposing this proposal by quoting, ‘It will be the violation of Licence Regulation’.
The term of all the mobile players is set to expire in the next few years, as the granted period of licence was only 20-year term in the 90’s, which is going to expire in the next few years. Airtel is the first mobile player, which licence term is going to expire in 2012, as it was the first and oldest mobile player in the country, while Tata Indicom is the newest and will expire in the last.
The DoT in its proposal has recommended that existing private players should pay Rs 825 crore as per its calculation - The entry fee of Rs 1,651 crore multiplied by 10 (the number of years for which the licence needs to be extended), and the total is divided by 20 (the number of years for which the telco can use the 3G spectrum)- for the period of ten-year extension as per renewing licence fee while TRAI has objected on this proposal and said, “The licences should be extended without any fee”, however it also added, “DoT has enough power to impose the licence fee on the mobile operators.”
On the issues of asking renewal charges, DoT argues that government is going to allocate the third generation (3G) spectrum soon and for the existing players that were using 2G spectrums cannot use 3G Spectrum before the end their previous tenure, while the new entrants who have bid successfully can use the 3G spectrum for the full 20 years.
As it is known, in the 3G Spectrum auction, several new entrants including major international players and all existing players are interested to get 3G spectrum allocation, but as per TRAI’s proposal, all the existing successful bidders will have to pay the same licence fee as the new players.
But, the issue is that ‘the time of expiring the 2G licences varies from players to players and till expiring the tenure, 2G telco cannot use the 3G spectrums’ as per DoT said and thus, they cannot also use the 3G spectrums for the full tenure of 20 years as the new players can do.
Thus, for giving the equal term opportunity, DoT is in the favour of fresh licence fee, as per it said in its proposal, “To extend a level-playing field amongst the existing operators and the new entrants, it is necessary to have a provision to extend the licence period of winning bidders from amongst existing operators to make it co-terminus with the period of 3G spectrum allocation.”
By imposing this new charges, DoT is eyeing to collect an additional Rs.3,000-crore from the existing mobile operators.
DoT had sought the approval of TRAI on its proposal of asking fresh licence fee on July 01, 2008 which TRAI had opposed and said, “The renewal of licence should not be linked with auction of spectrum for 3G. At present, the government is thinking of auctioning spectrum for 3G, while in the future some more spectrums may have to be auctioned for telecom services which would again necessitate extension of some licenses, if this practice is followed.”
“The extension of licence tenure is valid at free of cost until any extreme condition of security concerns come in the way,” added TRAI.
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