Three-five year lock-in for stake sale approved by the Telecom Commission.
The Telecom Commission has cleared a proposal prohibiting the promoters of telecom companies from selling their stake for three to five years. The move, industry experts say, is aimed at silencing criticism that Communications Minister A Raja has given 2G licences to new operators at throwaway prices, leading to a major loss to the excequer.
The Left parties and the Bharatiya Janata Party have alleged that the recent deals — Unitech’s 60 per cent stake sale to Telenor and Swan Telecom’s deal to sell 45 per cent stake to Etilasat — bought windfall to the Indian companies because the government gave them licences at low prices.The Left alleged that the government lost over Rs 60,000 crore by giving eight operators licences for a song.
However, the proposal allows new players to increase the equity capital and bring in a new partner.
The Telecom Commission will now amend the licence condition to mention that promoters with 10 per cent or more stake and whose net worth has been considered to determine the eligibility for the universal access service licence should not sell their equity for five years or alternatively for three years from the date the licence is issued.
The lock-in period, however, will not be applicable in case shares are transferred pursuant to enforcement of pledge by financial institutions and banks due to a loan default.
The move is expected to be challenged by the new operators in courts. The operators say this is a violation of the licence agreement on the basis of which they have paid the licence fee. However, Department of Telecom (DoT) officials say the licence incorporates a clause that the licensor reserves the right to modify at any time the terms of the licence if it feels it is necessary in public interest or in the interest of the security of the state.
Real estate developer Unitech Wireless had bought a pan-India licence for Rs 1,650 crore and then sold 60 per cent stake for an enterprise value of Rs 11,620 crore, nearly six times the value of the spectrum.
The Telecom Commission today also gave the go-ahead to a proposal for charging a standalone 3G operator 3 per cent of its aggregate gross revenue (AGR) as annual spectrum charge. The rate is equivalent to the 5 Mhz slab rate of 2G spectrum.
The operators will, however, be given a one-year moratorium. The government decided to impose an annual licence fee of 3 per cent of revenue on stand-alone 3G operators, Telecom Secretary Siddhartha Behura said on the sidelines of a press conference. However, he declined comment on the lock-in period.
The decision on the contentious one-time charge for spectrum above 6.2 MHz, however, was deferred. Raja had earlier indicated that the price could be set at Rs 4,000 crore. Behura said more time was required by some agencies before a final decision was taken.
The Telecom Commission, chaired by Behura, also approved an increase in the annual spectrum charge paid by the operators to the government. The spectrum usage charge up to 8 MHz will be increased by 1 per cent of the AGR. Above 8 MHz, the charges will be increased by 2 per cent of AGR for each of the respective slabs. The new slabs would be effective from January 1, 2009, added Behura.
The new rates were propsed by Raja after his meeting with Finance Minister P Chidambaram and Prime Minister Manmonhan Singh.
