Tata Tele Services writes to DoT old operators being favoured

Tata Teleservices, which offers both GSM and CDMA-based mobile services, has said a proposed telecom policy favours early incumbent GSM operators. It said the policy discriminated against dual-technology operators, making it unviable for them to do business.

“With such a policy, dual-technology operators will have no choice but to terminate their CDMA services and take huge write-offs on all their past investments,” Tata Teleservices Managing Director N Srinath said in a letter to the Department of Telecommun-ications (DoT) Secretary R Chandrashekhar.

The Tatas were responding to their discussions with Communications Minister Kapil Sibal and Chandr-ashekhar on May 28, in which Tata Group Chairman-designate Cyrus Mistry and Srinath were told by the DoT that it was working on a telecom package on the lines of one in 1999, which would be beneficial for the operators as well as the government.

The key features of the package were to ensure all operators, old and new, should be brought on the same footing by making all players pay spectrum fee that they use prospectively from a prescribed date at the auction-discovered price. The package, the government said, would also include a liberalised spectrum regime, re-farming of 800/900 MHz spectrum, an assurance that all court cases filed by operators and the government would be withdrawn and giving up on an old proposal to charge incumbent operators for spectrum beyond 6.2 MHz retrospectively. A Tata Teleservices spokesperson declined to comment on the letter.

Attacking the policy flip-flop, the letter said the decision not to charge retrospectively for holding excess spectrum beyond 6.2 MHz “will further aggravate the differences to new players” and did not seek to compensate operators deprived of spectrum for that period and suffered an inability to grow their network. It pointed out the benefit accruing out of that to incumbent operators and the loss to the exchequer had already been quantified by the CAG at Rs 36,993 crore. Excess spectrum beyond 6.2 MHz was given by the government to operators like Bharti Airtel, Vodafone India and Idea Cellular, among others.

Srinath, in the letter, also stated that even on the issue of re-farming of spectrum, though the government was committed to make it happen, clear rules were not being framed upfront. This issue was core to creating a level playing field and leaving it open for subsequent disputes, and delays would be further detrimental to new players, the letter said.

GSM players such as Bharti Airtel, Vodafone India and Idea Cellular hold spectrum in the 900-MHz band, which will be re-farmed as per the new proposal. However, the move has been opposed by the operators who have demanded the government have more discussions.