DoT to seek Cabinet nod to change norms to liberalise spectrum

The Department of Telecom is going to approach the Cabinet to seek its approval for change in policy to liberalise spectrum that were allocated to mobile service providers without auction.
"The DoT will approach the Cabinet to take its approval for changing existing policy to liberalise those spectrum that were allocated administratively (without auction)," a source told PTI.
The agenda is likely to be taken up at the Cabinet meet tomorrow.
The government expects a revenue of Rs 98,995 crore from communication services in 2016-17, which includes realisation of demand raised by DoT from telecom operators as one-time spectrum fees.

The previous government in November 2012 had decided to charge one-time spectrum fee from telecom operators who were allocated spectrum beyond certain limit without paying for it.
Initially, telecom firms were given 4.4 MHz spectrum along with licence for Rs 1,658 crore for pan-India operations and later they were entitled to get another 1.8 MHz on fulfilment of certain subscriber-base criteria. In November, the government decided that the operators should pay for holding spectrum above 6.2 MHz retrospectively, from July 2008 to January 1, 2013.

After that, for spectrum above 4.4 MHz, they would have to pay for the remaining period of their licences based on auction held last November. As per this decision, DoT issued demand notice to telecom operators on January 9. The government is likely to get Rs 4,251.83 crore from retrospective charges, and Rs 18,925.82 from prospective charges for excess radio waves held by mobile operators.

In all, around Rs 23,177 crore is expected from levy of one-time spectrum fee.
State-owned BSNL will have to pay around Rs 6,912 crore, followed by Bharti Airtel Rs 5,201 crore, Vodafone Rs 3,599 crore, MTNL Rs 3,205 crore, Idea Cellular Rs 2,113 crore (includes Rs 231.5 crore of Spice), Aircel Rs 1,365 crore (includes Rs 14 crore of Dishnet), Loop Mobile Rs 606 crore and Reliance Communications Rs 173 crore.
Later, the DoT added spectrum price of 1800 Mhz and 900 Mhz band for some circles. The government has given option to telecom operators who are not willing to pay the one-time fee to surrender their additional and excess spectrum.

The Telecom Commission in its meeting on February 22 also
noted that industry had bought spectrum worth Rs 3.45 lakh crore in the last few years.
Of this, Rs 1.90 lakh crore was been paid upfront, but about Rs 3.08 lakh crore is due over the next 11 years on account of deferred payment plans opted by telecos and interest due on such payments.
The telecom industry also owes about Rs 4.60 lakh crore to various financial institutions and banks, it noted.
"Further, the large exposure of banks and financial institutions to the telecom sector, slowdown in growth and potential defaults by telecom companies, which have so far had an unblemished default free record, can have a serious impact on the banking sector as well," the letter said.

The letter pointed out that the Telecom Commission felt that TRAI should implement its decisions and directions on promotional tariffs issued on June 19, 2002 and September 01, 2008 "both in letter and spirit".
The Commission was of the view that the said directions required promotional tariffs to have a 90-day limit and tariff of any other promotional nature could not be offered beyond that period.
"... In case TRAI has a different interpretation of the ... Decisions and directions, there appears to be an urgent need to revisit and review its tariff orders...In the larger interest of government revenue as well as the telecom sector as also to ensure orderly growth of the telecom sector which is the responsibility of the TRAI...," it said urging the regulator to address the matter urgently.

It may be recalled that newcomer Reliance Jio launched an inaugural free voice and data plan beginning September, and in December extended the freebies till March 31, 2017.
Following this, the incumbent operators like Bharti Airtel and Idea Cellular moved the telecom dispute tribunal TDSAT against the regulator TRAI for allowing the new operator to continue free promotional offer beyond the stipulated 90 days.
The operators charged the regulator of being a "mute spectator" to the alleged violations, and the matter is currently in TDSAT, where the two sides are presenting their arguments.