DoT gears up to issue LoIs without spectrum guarantee
1 Dec 2007, 0202 hrs IST,Shalini Singh,TNN
NEW DELHI: There are strong indications that the telecom ministry is going ahead with granting letters of intent (LoI) for telecom licences under its first-come-first-served (FCFS) policy despite the scrutiny it faces from the PMO, finance ministry, Parliament and the Competition Commission of India (CCI).
According to a senior DoT official, the 250 applications received on or before September 25 are being processed and may be awarded within 4 to 10 days. On September 25, the DoT had announced October 1 as the cut off date for receiving applications and this move makes the announcement of the cut off, the actual cut off date.
Telecom minister A Raja had indicated this intention to the Prime Minister in a letter dated October 2, 2007 which has since, created severe distress amongst applicants that applied after September 25.
The DoT official, further confirms a move to eventually issue LoIs to all 575 applications, but without any guarantee of spectrum. Companies fear this could place them in a difficult spot. Once LoIs are issued, they will be forced to pay up the licence fees. "Since the government’s policies are uncertain and shifting, this means blocking a sizeable investment with no guaranteed returns," they point out.
The DoT is further drafting LoI’s for these new applicants and seeking clarifications and corrections on anomalies if any, in the applications, alongside. This is a departure from practice as the DoT always seeks corrections and full information before the issuance of any LoI since LoI’s are legally binding.
This means even those companies that would have failed to qualify due to incomplete applications will now be in the running. Official sources confirm that many non-telecom players would have been weeded out if the normal practice of issuing LoI’s after obtaining clarifications is followed.
According to industry sources, serious and unprecedented litigation awaits the issuance of such LoI’s from three quarters. Choosing an inter se priority based on date of applications means several companies such as Shyam Telecom, India Bulls and Unitech who are at the back of this queue are eliminated. Since in the past, licences/spectrum have been issued based on date of payment and submission of application for spectrum, a change in policy (inter se priority based on application date) is likely to invite litigation from several companies.
On the other hand, if date of payment becomes the inter se priority then companies waiting with applications for nearly two years like Idea, Spice, and others, have a reasonable chance of losing their preferential position.
Spice and ByCell for instance, have international partners and this could delay their ability to make instant payments. Finally, several of the 20 odd companies with an additional 325 applications who will be left out of the September 25 deadline have sought legal advice.
Raja is in a serious quandary since he has committed to the PMO about the September 25 cut off date in writing. ToI has also learnt that the Law Ministry has expressed its inability to provide legal advice to support Raja’s FCFS approach
Source: Times of India
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Incumbents must return excess spectrum: Raja |
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Communications Minister A Raja has made it clear that the department of telecommunications (DoT) would stick to its stand that mobile operators return all excess spectrum (the radio waves that enable wireless communications) that they have received beyond their contractual obligations. |
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The game-plan is to "refarm" excess spectrum equitably between new and incumbent operators. |
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According to top officials at the ministry, DoT will be forced to take back spectrum from the operators unless they decide to surrender it. |
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"Three leading operators have excess spectrum beyond 6.2 MHz and there is no Cabinet approval for spectrum allocations beyond 6.2 Mhz. The previous BJP-led government gave it away without Cabinet approval. The matter has already been raised in Parliament and a CBI enquiry has been demanded by some politicians," said the official. |
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Under the licence agreement, operators of GSM services are entitled to spectrum up to 6.2 MHz while CDMA operators have been permitted spectrum up to 5 MHz. |
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Raja met Prime Minister Manmohan Singh this evening to discuss the contentious telecom issue. This is the second meeting between the two in the past few weeks. |
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Meanwhile, DoT Secretary D S Mathur has again called all the CEOs of telecom companies for a follow up meeting to discuss possible solutions to the telecom imbroglio. Mathur had a meeting with all the top telecom chief executives just a few days ago when these companies gave their views on the issue. |
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"The ministry is politically bound to look for a settlement and conciliation and that is why DoT is going to talk to the operators again," a source added. |
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DoT is also raising another issue — with regard to the Telecom Regulatory Authority of India continuing to pursue a policy of "forebearance" (where operators are allowed to fix their own tariffs) for telecom tariffs. |
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"Cable TV rates are being regulated and set at very affordable levels by the same regulator. However, the same regulator is allowing telecom operators to set their own tariffs. Why is it that all GSM operators offer the same rates and don’t compete among themselves? There is no healthy competition in the sector," a source said. |
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DoT has also once again ruled out a proposal from the GSM operators — that spectrum beyond 10 Mhz be auctioned. "That is legally impossible," a source said. |
Source: The Business Standard
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DoT to offer 7-point peace plan to GSM CEOs on Monday Sources said that the DoT will offer a seven-point settlement package to GSM players in a bid to end the stand-off over spectrum allocation and to do away with all litigation concerning the new telecom policy. As first reported by ET, this compromise formula addresses all core concerns of the GSM players and involves accepting telecom regulator Trai’s recommendation that existing service providers increase their subscriber base two-to-six times before they are granted additional spectrum. Further, the settlement package offers 4.4 MHz spectrum to operators like Vodafone, Idea and Aircel for launching operations in new circles, and allows the use of dual technology. It also states that two new entrants will be given licences in each circle to launch services. The formula also envisages the auction of 3G spectrum in chunks of 5 MHz each thus protecting existing players from new and foreign competition and adds that mobile number portability will be extended across the country, not just the metros as announced initially. DoT has invited Bharti Airtel chairman Sunil Mittal, Vodafone’s global CEO Arun Sarin, Reliance Communications chairman Anil Ambani, Tata group chairman Ratan Tata, Spice chairman B K Modi and Kumar Mangalam Birla of the Aditya Vikram Birla group, which owns Idea Cellular and also representatives from HFCL, Aircel, Shyam, BSNL and MTNL for the Monday meet, sources added. Earlier this month, DoT secretary D S Mathur held talks with all telecom CEOs but the meetings failed to resolve the spectrum imbroglio and ended inconclusively. During the last meet, leading GSM operators had told the Department of Telecom (DoT) that they are willing to negotiate towards arriving at new spectrum allocation norms using the current allocation criteria as the benchmark. They had also said they would not use the Trai recommendations or the Telecom Engineering Centre’s report as the base and negotiate a downward revision. In addition, they had also told said while they were willing to discuss a settlement, the government could not make withdrawal of their litigation as a pre-condition for negotiations. Meanwhile, in a related development, the new DoT committee with industry representation, which had been set up to formulate new spectrum allocation guidelines, had its second meeting on Friday, but did not take any decision. All stakeholders have made their presentations to this committee on evolving a new spectrum allocation norms and a final decision will be taken only after studying all comments, said a source. |
Source: The Economic Times
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Spectrum panel to meet again next week ---------War of words between Bharti and Reliance continues |
New Delhi, Nov. 30 The third meeting of the panel set up by the Communications Ministry to review the spectrum allocation norms did not come to any conclusions on Friday.
The panel, comprising experts from Indian Institute of Technology and the telecom industry, will meet again on December 5 and 6 before submitting its report to the Government.
During the meeting, officials from the Telecom Engineering Centre made a presentation backing their subscriber-based spectrum allocation norms.
According to industry sources, the TEC norm was put under scrutiny by cellular operators but they could not point out any flaw in the calculations, though some points were made on the assumptions made by the technical body.
TEC pointed out that the enhanced subscriber base criteria was based on the data provided by the cellular operators themselves.
MTNL and Spice Telecom also made presentations. The State owned company said that it should be given priority while allocating spectrum since it was at a disadvantage compared to private players.
Meanwhile, in a related development Bharti Airtel and Reliance Communications fired fresh salvos against each other. In a statement issued, Bharti said that CDMA operators should stop spreading misinformation over spectrum issues and refuted their calculations regarding quantum of airwaves allocated to GSM players. "It is time for our detractors to accept that others have an equal opportunity and right to succeed in this country," Bharti said.
RCom responded by saying that Bharti was "typically self-contradictory". The company alleged that Bharti Airtel has illegally captured spectrum in excess of 6.2 MHz by misleading DoT.
Source: The Hindu Business Line
Meridian Mobile launches Hummer in India
New Delhi, Nov. 30
Meridian Mobile, a 100 per cent subsidiary of the UK-based handset maker Meridian, is expanding rapidly in India by developing a large offering under the Fly brand.
The company has tied up with General Motor’s Hummer as a part of associational branding. French handset maker ModeLabs has carried over General Motor’s Hummer licence to mobile phones. Meridian is launching the HT1, a slider mobile phone model in the country. The phone like the Hummer vehicle is differentiated in style.
Fly is the brand under which Meridian sells its mobile handsets.
Hummer by Fly will be marketed as an aspirational brand and is targeted at youngsters. Speaking about the tie-up Mr Rajiv Khanna, CEO, Meridian Mobile Pvt Ltd, said: "Hummer is an aspirational brand. This tie-up also indicates the highest level of workmanship in the brand. Fly began pan India distribution one year back. In the first year 2007, we will do 200,000 phones."
The phone comes with a 262k colour LCD with touch screen, a two megapixel camera and GSM connectivity.
Source: The Hindu Business Line
News dated 01-12-2007