Dot Prepares Cabinet Note On Extending Cellular Licence Period

The department of telecommunications (DoT) is preparing a note to be sent to the Union cabinet which seeks permission to pass on to the Telecom Regulatory Authority of India (TRAI) the issue of extension of the licence period from 10 to 15 years and a two-year moratorium on payment of licence fees for cellular companies.

This is being done to get cabinet sanction for the proposal mooted by DoT after the Delhi High Court ruled on July 16 striking down a February 13 TRAI ruling that DoT could not exercise its licensing powers without consulting the regulator.

The move to ask TRAI to study the cellular operators' proposal is part of a department rapprochement package to the beleaguered cellular operators. A DoT source said, "This is a slightly sensitive issue.

The government does not want to set a precedent with this offer to TRAI. We want to make sure that it is a one-off decision." The department is of the view that the sole arbiter of licensing issues is the government and TRAI has no role whatsoever.

Once cleared by the cabinet, DoT is expected to make a formal offer to cellular operators. Meanwhile, the operators have said that they are willing to accept a department condition that it will be binding on both the government and the companies to accept "whatever decision that the authority (TRAI) takes. DoT has set December 31 this year as the deadline for a decision on the issues.

The cellular operators acceptance of the government demand settles the differences between cellular operators over future government policy. Some of the Mumbai and South India-based cellular operators have not always seen eye to eye with their North India counterparts on several issues.

Cellular companies have been asking for a five-year extension from ten years to 15 and a two-year moratorium on payment of licence fees to get over the cash crunch they are in. The industry, which has invested some Rs 8,000 crore in cellular equipment, claims to be making a cash loss of Rs 400 crore a month.