DoT begins 2nd phase of unified licensing

Seeks Trai's recommendations on de-linking network permits from delivery of services

In a bid towards moving to the next stage of the unified licensing (UL) regime, the Department of Telecommunications (DoT) has sought the views of the Telecom Regulatory Authority of India (Trai) on de-linking network licences from delivery of services. DoT has asked Trai to give recommendations on the issue, along with detailed views on adjusted gross revenues (AGR) and terms of sharing passive and active infrastructure under the UL.

Last year, a DoT committee on UL had opposed the de-linking of network licences from the delivery of services in the first phase, and proposed de-linking to be addressed in the second phase.

The DoT committee had stated that the introduction of UL, providing either for network services or service delivery or both, would bring about fundamental changes in the sector. It had said in the first phase the UL should be structured in such a manner that the transition to the second phase would be smooth.

According to experts, the government might now have to re-look at the proposed guidelines on spectrum sharing. Plus, the submissions by those in the sector on AGR would also have to finalised before finalising the levy from network licencees and operating licence holders.

The move, if implemented, would benefit operators to better utilise existing infrastructure and is likely to reduce the creation of duplicate infrastructure by competing service providers.

According to the draft UL document, de-linking in the UL regime should allow flexibility to service providers, following the cafeteria approach of allowing the licence holder to pay according to use. The new and the existing licence holders would have the option to select one or more or all services on offer through UL after migration to the new licensing regime.

The cafeteria approach, which allows service providers to apply for UL with a much lower net worth and capital requirement compared to the earlier licensing regime, is also seen to be an enabler for service providers in bringing more affordable service offering, especially in the data segment. This would, in turn, increase broadband penetration and better teledensity in rural areas.

According to the UL guidelines, the minimum net worth requirement of Rs 100 crore for providing IPTV services under internet services has been removed, noting that cable TV operators registered under the Ministry of Information & Broadcasting can offer TV services on IP without any net worth requirement. Meanwhile, the DoT committee on UL noted that the licence fee would be eight per cent of the AGR.