Telecom Commission clears way for Mukesh Ambani's re-entry into mobile

Inter-ministerial body Telecom Commission Monday approved a recommendation that allows companies having ISP licences and holding 4G spectrum to offer phone calls services by paying a fee of Rs 1,658 crore each, a decision that left industry bodies divided.

Updated: Feb 19, 2013, 10:00 AM IST

New Delhi: Inter-ministerial body Telecom Commission on Monday approved a recommendation that allows companies having ISP licences and holding 4G spectrum to offer phone calls services by paying a fee of Rs 1,658 crore each, a decision that left industry bodies divided.

The Telecom Commission decision, if finally approved by Telecom Minister Kapil Sibal, will allow companies like Mukesh Ambani-led Reliance Jio Infocomm (RJI), Augere, Tikona Digital, if they want, to offer mobile phone service using BWA spectrum that they won in 2010 auction.

"The Commission broadly endorsed recommendation of DoT committee with regard to Unified Licensing regime...The ISP (Internet service provider) licence holder who hold BWA spectrum if they wish to provide using that spectrum then an additional fee of Rs 1,658 crore will be levied for migration to unified licences (UL)," Telecom Commission Chairman R Chandrashekhar, who is also the Telecom Secretary, said here.

The framework for new licences will be ready by end of this financial year, he added.

For companies who wish to continue to "provide limited services like only Internet services under cafeteria approach they can do so with a lower entry fee which will be same as present," Chandrashekhar said.

Telecom service providers who want to provide any additional services apart from their current offerings, will have to go for unified licence. In case of mergers and acquisitions also, the companies need to go for unified licence.

"UL (Unified licence) does not include any spectrum. Grant of UL including migration to UL does not include any spectrum," Chandrashekhar said.

Reacting to the development, GSM industry body COAI said that it had recommended the Department of Telecommunications (DoT) to charge ISP companies amount equivalent to what companies mobile phone service providers paid for licences.

"This is the cost if you want to enter voice telephony business. We support government not bundling spectrum with this payment," Cellular Operators Association of India's Director General Rajan S Mathews said.

The Association of United Telecom Service Providers of India (Auspi), however, said the charge of Rs 1,658 crore is minuscule compared to the amount that companies paid for 3G spectrum.

"Telecom Commission's reported action will allow BWA licencees to offer Pan India Voice after paying a paltry incremental amount of Rs 83 crores per MHz. Given that the difference between the prices of 3G and BWA on a per MHz prices was Rs 1,033 crores per MHz," Auspi Secretary General Ashok Sud said.

Internet Service Providers Association of India's President Rajesh Chharia criticised the decision and said: "This is not at all a level-playing field. These charges are abnormally high without spectrum."

In 2010, six private players--RJI, Bharti Airtel, Aircel, Qualcomm, Tikona Digital and Augere-- had won BWA spectrum.

The Telecom Commission deferred decision on single entity providing both telecom and television services like mobile calling services, DTH, cable TV that would charge customers for all these services through a single bill.

"We are putting framework in place to enable this model but it will require recommendation from TRAI and can be done in phase 2 of UL," Chandrashekhar said.

The TC also deferred decision on bringing telecom tower companies, called IP-1, under licences.

"Issue of IP-1 operators under UL regime was deferred and it was decided that this required further study of certain aspects," Chandrashekhar said.

Companies like Bharti Infratel, GTL Infrastructure, Indus Towers are involved in IP-1 business. The DoT committee had recommended bringing IP-1 companies under licence regime.

Telecom regulator TRAI has recommended a charge of 8 percent licence fee to IP-1 companies once they are brought under licences.

In a separate decision, Telecom Commission endorsed around Rs 3,000 crore support for mobile services in Left wing extremist affected areas through Universal Service Obligation Fund for a period of 5 years.

"This proposal will have to be finally approved by Cabinet," Chandrashekhar added.

The Commission also approved grant of Rs 6 crore for ITI for deficit incurred in its operations of Sringar unit in 2011-12 and this decision does not need Cabinet approval, he said.