Telecom ministry to refer major policy decisions to Cabinet

The telecom ministry is likely to refer major policy changes in the sector, including pricing of excess spectrum and delinking of spectrum from licence as recommended by the sectoral regulator, to the Cabinet for a final decision.

The Telecom Commission, the highest decision making body of the Department of Telecommunications (DoT), was expected to meet next month to consider the recommendations of the Telecom Regulatory Authority of India (Trai) on spectrum management and other licensing issues, a senior DoT official told Business Standard.

However, after the deliberations in the Telecom Commission on all the issues, the main policy changes would be referred to the Cabinet for a final decision, the official said.

The Telecom Commission has members from the finance ministry, Planning Commission, the Department of Industrial Policy and Promotion as well as the Department of Information Technology. There could be differences between the various ministries over policy issues, as it would impact the whole sector, the official added.

“The major proposed policy changes such as revising the structure of the unified access service licence and delinking of spectrum from licence and pricing of excess spectrum will be taken to the Cabinet since these decisions were earlier taken by the Cabinet under the aegis of the National Telecom Policy, 1999. Any change in the letter and spirit of this policy on licence and spectrum issues has to be subjected to the scrutiny of the Cabinet and Parliament,” the department said in a note for Telecom Commission.

DoT had set up a committee to look into the regulator’s views. It has accepted in principle a majority of views of Trai, including a one-time fee on operators for holding spectrum beyond contractual limits and mergers and acquisitions rules, under which a combined entity after merger will have a total market share of 30 per cent and not more than 14.4/10 Mhz of spectrum.

Trai’s recommendations assume importance in the wake of a growing need for consolidation in the telecom industry, which has been witnessing low tariffs and declining revenues. The average revenue per user as well as the profits of the operators has also taken a hit due to low tariffs, which started when new players started their services in late 2008. Second, if accepted, Trai views on pricing on spectrum will also enable the exchequer in realising the value of spectrum and increase its revenues with the current times.