COAI hints possibility of legal dispute on new licensing rules

Describing the new rules related to new telecom licences as "coercive in nature", industry body COAI has indicated that unilateral imposition of the norms on incumbent telecom operators could lead to legal disputes.

Referring to migration rules framed in 1999 under the then telecom policy where operators were given choice to shift to new permits, Cellular Operators Association of India said the same principle has been ignored while framing the new rules.

"Provisions of migration to UL are coercive in nature as the UL guidelines require compulsory migration to UL in several circumstances, which infringe on the rights of our member operators to do business under the existing contracts/ agreements signed with the DoT," COAI Director General Rajan S Mathews said in a letter last month.

The new licences does not differentiate between 2G, 3G or 4G technology and allows companies to use any technology for providing mobile and other telecom services in service area where they have airwaves.

COAI's member Idea Cellular last week got Unified Licences for seven service area to use spectrum which it procured in November 2012 auctions.

Licences of Airtel Delhi and Mumbai and that of Vodafone in Delhi, Mumbai and Kolkata are due to expire in last quarter of 2014 after which, as per the new rules, they will have to take UL for continuing their operations in these service areas.

Mathews further said: "It is also most respectfully submitted that several of the issues are under challenge in various courts and any attempt by DoT to unilaterally enforce such provisions would tantamount to it acting as an adjudicator in its own cause."

COAI cited cases like one-time spectrum charge imposed on telecom operators which it said is under stay. Similarly, it said the hike in spectrum usage charge is under stay in Supreme Court.

 The industry body said that DoT should apply 'No Worse Off' principle while offering terms and conditions for the Unified Licencing so that existing licence holders are not bereft of their present rights when they migrate to UL.

COAI says DoT should keep current guidelines for the grant of Unified Licence issued on August 19 in abeyance and send it to Telecom Regulatory Authority of India for review.

"The guidelines should be finalised by DoT only after prior detailed discussion with the licencees in the Open House Discussion with the Hon'ble Minister (Kapil Sibal) and the comprehensive review of the issues on UL by Trai," Mathews said.