Dot To Allow Assignability In Basic, Cellular Licences

The commission is also likely to reduce the interconnect charges that it prescribed in the agreement given to operators on September 9 by some 10 per cent. It had brought down port charges by 30 per cent then. DoT is also likely to soften its earlier stance on other contentious issues in the interconnect and licence agreements.

Assignability is defined as the making over of any right to another; which in other words means a transfer of the right (the licence, in this case). However, telecom sources want the DoT to ignore the narrow definition of the word and follow the practice of assigning a licence to funding institutions prevalent worldwide.

 

Top officials at DoT are deliberating on how to word the assignability clause in the licence agreement and get over the sensitive issue of transferability of licences. The tender guidelines for basic telecom services had very clearly stated that the licences would not be transferrable.

The DoT decision follows considerable pressure from the finance ministry to get the basic telecom tenders, which have been stuck for the past few months, operational. Private entry into basic telecom service has been stalled over the contentious licence and interconnect agreements.

The finance ministry expects that a substantial portion of the $10-billion foreign direct investment target set by the United Front government will come from international telecom investors. The government had cleared foreign investment proposals worth Rs 28,000 crore last fiscal.

Telecom commission members have been advised by top FI officials on licence and interconnect agreements in the last few weeks. It is learnt that the FIs made it clear they would not lend to telecom projects unless the licences were made assignable.

DoT has set a fresh deadline of October 18 for basic telecom operators to sign the licence and interconnect agreements. While giving feedback on the agreements to DoT, the operators had specified that they expected it to accomodate some of their demands, failing which the projects would have to be shelved.

The change in DoTs adamant stance on assignability comes as a surprise since communications minister Beni Prasad Verma told Rajya Sabha a few weeks ago the demand for transfer of telecom licences had not been agreed to because it was in violation of tender conditions.

Answering a question raised by Rajya Sabha MPs Dipankar Mukherjee and Nilotpal Basu, Verma had said that basic telecom bidders had been requesting for allowing assignability of the licences to FIs.