Sibal delinks spectrum from licences; new telecom policy soon

Telecom Minister Kapil Sibal announced that no licence would be issued bundled with spectrum and also the operators would have to pay a market price for an additional spectrum.

Updated: Jan 29, 2011, 13:52 PM IST

New Delhi: In a major shift in spectrum
allocation policy, Telecom Minister Kapil Sibal on Saturday
announced that henceforth no licence would be issued bundled
with spectrum and also the operators would have to pay a
market price for an additional spectrum.

He also said that for new operators the contracted
amount of spectrum would be 4.4 Mhz and for the incumbent
players like Bharti, Vodafone and Idea the limit would be 6.2
Mhz.

"In future, the spectrum will not be bundled with
licence. The licence to be issued to telecom operators will be
in the nature of `Unified Licence` and the licence holder will
be free to offer any of the multifarious telecom services.

"In the event, the licence holder would like to offer
wireless services, it will have to obtain spectrum through a
market driven process," the minister said.

This means the new operators, if their licences are held
valid, would have to pay a market price for the additional 1.8
Mhz of 2G spectrum and this may make their operations
financially unviable.

While for the old operators, who are holding spectrum
beyond 6.2 Mhz would have to pay market driven price for the
extra airwaves.

These changes would be implemented with immediate
effect, Sibal said.

"We need to seriously consider the adoption of an auction
process for allocation and pricing of spectrum beyond 6.2 Mhz
while ensuring that there is adequate competition in the
auction process," Sibal told reporters here.

He also announced that there would be a uniform rate of
revenue share to be paid by the operators as spectrum charge
to the government as part of level playing field for all
players.

These changes would be part of new telecom policy being
framed by the Department of Telecom.

PTI