Paging Licensees Allowed Assignability

The department of telecommunications (DoT) has cleared assignability of paging service licences. The decision, officially notified last week, follows a demand of the paging companies that the assignability status accorded to cellular and basic telecom companies be extended to them.

Assignability enables a lender to a licensee company to take over the licence and transfer it to another company in the event of default in loan repayment by the former.

In 1996, domestic and foreign financial institutions and banks came up with the demand for assignability, without which, they felt, it would be too risky for them to lend to domestic telecom service companies, reeling under huge licence fee commitments.

DoT, after discussions with FIs and banks, came up with an assignability clause later that year, which allowed a tripartite agreement to be signed between DoT, the operator and an FI. The agreement was broadly acceptable to most lender, although some domestic lenders still hold reservations.

Assignability was first allowed to cellular and basic telecom operators (Modicom Networks, the cellular licensee in Punjab and Karnataka, was the first to sign a tripartite agreement). When paging companies demanded that they be allowed the same, they were assured that their licences would be assignable.

Assignability of their licences is among some longstanding demands of paging service operators. The operators want permission to interconnect their networks in different cities through V-SAT (very small aperture terminals) since it is a cheaper option than DoT leased lines.

This demand has not got the assent of DoT officials. They hold the view that since there was no way to monitor whether voice or data would be carried over the V-SAT links, it might be misused by paging operators a view that the Indian Paging Services Association has sought to negate.

DoT feels that VSAT-connectivity between cities would be a transgression of the departments monopoly over long-distance services both data and voice.