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EGom decides on roll-out obligations for telcos

Last Updated: Wednesday, July 18, 2012 - 16:09

New Delhi: A high powered ministerial panel headed by Home Minister P Chidambaram on Wednesday decided to make it mandatory for telecom operators who will get spectrum through auction to roll-out services in 30 per cent of block level headquarters in five years.

The Empowered Group of Ministers (EGoM) also discussed the pricing of spectrum which as per the Supreme Court mandated deadline has to be auctioned by August 31.

However, no decision was taken and the panel is likely to meet again on Friday.

"Under the new proposal, for those who acquire fresh spectrum... The roll-out obligations would be to cover 10 per cent of the blocks in the third year, 20 per cent of the blocks in the fourth year and 30 per cent of the blocks in the fifth year," Telecom Minister Kapil Sibal told reporters here.

He added the obligations apply to both existing and new players. As per existing norms, operators have to cover 10 per cent of the district head quarters within first year of allotment of spectrum.

Earlier, Telecom Regulatory Authority of India (Trai) had recommended that operators should cover 50 per cent of villages having population of over 2,000 people in three years and 100 per cent in four years from the date spectrum is allocated to them.

The TRAI proposal was criticised by industry with Norwegian firm Telenor even saying it would quit if network roll-out recommendation is approved.

Although the EGoM discussed the issue of spectrum usage charge and reserve price, no decision was taken.

"There was a discussion on two issues namely the spectrum usage charges and the reserve price... It will be continued on Friday morning when the group will meet again," Sibal added.

Sibal was asked whether the Department of Telecom (DoT) has been told to prepare a matrix of spectrum reserve price and its likely impact on tariffs and revenue to government.

The Minister said: "There are ongoing discussions that are taking place and hopefully a final view will be evolved after full discussion on Friday if possible".

Sources said DoT has been asked to prepare a matrix of various levels of reserve price and spectrum usage charge at every Rs 1,000 crore difference in descending order and the impact it would have on tariffs for end-consumer and the revenue accrued to the government.

The same is to be presented to the EGoM in its next meeting scheduled for July 20. The staggered payment option for telecom operators will also be discussed in this meet, sources said.

The inter-ministerial panel, the Telecom Commission did not favour staggered payment option.

Sectoral regulator Trai had recommended a minimum reserve price of over Rs 3,622 crore for auction of one Mhz of spectrum in the 1800 Mhz band, amounting to over Rs 18,000 crore for a pan-Indian operations in case of a new entrant, for 5 Mhz.


First Published: Wednesday, July 18, 2012 - 15:53
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