DoT Committee suggests simpler exit route for telecom firms

Telecom companies could soon have a simpler exit route, with the required permission to sell or transfer their entire business to a different entity becoming a thing of the past.

In its first meeting last month, a special committee of the department of telecommunications suggested simple exit routes for telecom companies in India. The committee was constituted to identify issues and concerns of the telecom industry and to propose possible solutions.

The committee noted that there was no reason to ask for clearances that take a few to many months and may disrupt services if there is a transfer of business. However, trading and sharing won’t be an answer for easy exit. With transfer of business, permission to exit may be transferred within the licence period, it added. At present, companies can exit the sector by way of surrendering licence and spectrum.

On the other hand, the committee has also suggested that internal restructuring of telecom companies would be re-looked, as in case of merger and acquisitions there could be a chance of misusing the concept of sole beneficiary as defined in the licence terms in the auctions held in November 2012. However, the committee did not suggest any solution.

On liberalisation of 3G and broadband wireless access (BWA) spectrum, the committee has suggested that recommendations of the Telecom Regulatory Authority (Trai) should be taken into account after assessing possible implications. On the other hand, the committee has noted that segregation of revenue from BWA services would required huge technical capacities. It has suggested that the department should give further orders on the issue.

The committee has also discussed the intra-circles 3G roaming issue, and its implications, but did not suggest anything. The issue is currently with the Supreme Court.

Among other issues, the committee has taken note of the changing penalty structure, and the policy on unconditional undertaking or clearing dues. It noted demands raised that are not enforceable will not be treated as dues and it encourages litigation as everybody would like to get an injunction, and the issue needs to be addressed.