Bharti may be asked to pay for extension of tenure for merged licence of Chennai and Tamil Nadu

The Department of Telecommunications (DoT) is likely to ask telecom operators to pay spectrum charges for their merged licences for Chennai and Tamil Nadu telecom circles if they have got any extension of the licence tenure. Most of the mergers were approved in 2007.

The move would increase burden of the country’s largest mobile carrier by subscriber base Bharti Airtel as the company had got extension for Chennai spectrum from 2014 to 2021. According to norms at that time, companies got the extension as the Government had decided that the merged licence would have validity of the one which had a later expiry date.

The issue came up after Aircel applied for the merger of its licences for the two telecom zones in October 2010, five years after the Government had issued the guidelines in 2005. Aircel would get validity extension for the merged licence from 2014 to 2018.

Since in terms of current policy, spectrum is delinked from licence and all spectrum is to be acquired at market determined price, for the extended period of licence – 20914 to 2018 in respect of erstwhile Chennai service area Aircel should be asked to pay for the spectrum, according to a recent discussion.

It further added all the licencee who have merged their licences of Chennai and Tamil Nadu should also be charged in the same. The basis of charging may be derived from the proporating formula proposed in the notice inviting applications (NIA) in respect of service areas where [partial spectrum has been put to auction.

When the merger of licences happened for Bharti Airtel (on January 5, 2007), the spectrum was bundled with the licence and there was no concept of one time spectrum charges and accordingly the licences were merged without any spectrum charge, according to another discussion of DoT.

Tata Tele Services, Reliance Communications (RCom) and Bharti Airtel were the operators to merge their operating permits for the two telecom service areas. There was no extension for Tata tele Services and RCom as the effective date of their licences of Chennai and Tamil Nadu were August 31, 2001 and September 26, 2001 respectively being migrated from a single basic service licence to two unified access services licences and then merged into single unified access service licence for Tamil Nadu.

However, the Governmebnt is yet to take any decision on the matter.