DoT is the best judge for unified licensing: LawMin

Early this month, DoT has referred the final draft of the UL Agreement to the Ministry of Law and Justice for legal vetting

The much-awaited unified licensing (UL) regime gets a new twist. Now, the ministry of law and justice has pushed the ball into the court of the Department of Telecommunications (DoT), saying the latter is the best judge to take a call on the technical matters associated with the UL agreement.

Early this month, the DoT had referred the final draft of the UL agreement to the law ministry for legal vetting, after Communications and IT Minister Kapil Sibal’s approval. Incidentally, Sibal is also the law minister.

The UL is part of the government’s plan to adopt a ‘One Nation-One Licence’ strategy. In the new licensing regime, spectrum will be de-linked from licences.

On perusal, it is seen  the terms and conditions of the licence agreement are technical in nature for which the DoT is the best judge to take a decision, the law ministry said in a recent communication to the department.

The ministry added it presumed that all provisions of the UL agreement had been carefully gone through and consciously agreed upon, and the DoT had consulted experts about the technical provisions.

The law ministry has, therefore, said the UL agreement might be finalised and acted upon by the DoT after satisfying itself that all requirements are fully met.

The DoT hopes to finalise other related documents such as wireless operating licences and migration documents, which would accompany the UL, by July 22. For the UL phase-II, the DoT is likely to make a reference to the Telecom Regulatory Authority of India by July 15.

In the new UL agreement, the DoT has proposed to abolish cross-holding of equity among telecom operators holding spectrum in the same service area. In the event of holding or obtaining access to spectrum, no licensee or its promoters should directly or indirectly have any “beneficial interest” in another licensee company holding spectrum in the same service area, according to the final guidelines.

Promoter means any legal entity other than the Central government and financial and scheduled banks, which hold 10 per cent or more equities in the licensee company, it stated. Beneficial interest means holding any equity directly or indirectly in the licensing company.

Telecom operators having arrangements contrary to the new guidelines will have to comply with the new norms within a year.

Once implemented, all licensees will have to migrate to the UL if they wish to expand the scope of their service by including any additional service or service area. If a licensee merges itself with a telecom service provider that has not migrated to the UL regime, the merged entity will have to migrating to it.

On migration, the new UL will be for a period of 20 years from the effective date of the UL, irrespective of the validity period of the licence it already held, according to the guidelines.

The entry fee for the UL would be a maximum of Rs 15 crore. Besides, companies will have to pay annual licence fee of eight per cent of adjusted gross revenue for each circle. From the second year, the licence fee would be a minimum of 10 per cent of the entry fee of the respective authorised services and service area.