Rs 6k cr for jumping spectrum queue
S Tel, one of the new applicants for
telecom licences in all circles in the country, has
told prime
minister Manmohan Singh that the company was
willing to pay Rs 6,000 crore
in addition to the
Rs 1,600 crore licence
fee, if it was given spectrum to launch 2G services. (S Tel is 49% owned
by Mauritius-based Telecom Investments and 51% by Skycity Foundations. Interestingly,
despite its 41% stake, Skycity’s networth is a mere Rs 1 lakh, when compared to Rs 1,000
crore for Telecom
Investments.) S Tel has also pointed out that if other telecom applicants too
were willing to follow this model, the government would earn over Rs 50,000 crore, in addition
to the entry fee and revenue share that telcos
pay.
The move is on the lines of the offer
made by Tata group chairman Mr
Ratan Tata who had
said that Tata Teleservices
was willing to pay Rs 1,500 for 3G spectrum.
Following Mr Tata’s
communication to the PM, the DoT asked telecom
regulator Trai to revisit its recommendations
on 3G spectrum. The regulator, which had first said that 3G spectrum should be awarded for
free, then proposed that it be auctioned with a base price of around Rs 1,400 crore.
S Tel’s offer comes even as telecom
minister A Raja has said that the DoT will not auction
2G
spectrum, but follow the current policy of awarding licenses (which come
bundled with 4.4 MHz
of 2G spectrum) on a first-come-first-served basis. Apart from
existing operators who hold
licenses but have not been awarded spectrum (Idea, Aircel
and Vodafone), S Tel lies sixth in
the queue for allotment of spectrum after Bycell,
Tata Teleservices, Spice,
Swan, Cheetah and
HFCL. “S Tel is of the view that the policy that was evolved when the
industry was at its
infancy , will not serve the public purpose now when the industry is among
the most advanced .
Consistent with its knowledge and
understanding of the business of telecom and the high value
of the spectrum, S Tel comes forward voluntarily to pay additional
revenue share to the extent
of Rs 6,000 crore
to the DoT, over and above the spectrum charges
revenue share payable as
per the existing policy, over a period of 10 years from the date of
the spectrum allotment. This
will bring into effect a prioritisation
model, which will fully serve the larger public interest,” the
company has told prime minister Mr Singh.
Justifying the move, the company told
Mr Singh: “We believe that this prioritisation
procedure
will , over and above S Tel’s contribution of Rs
6,000 crore , generate additional revenues of Rs
50,000 crore
over the next 10 years to the government, while at the same time ensuring that
the Trai recommendation of 2 G spectrum not
to be auctioned is also followed. The suggested
procedure is not an entry barrier like an upfront license fee, but a formula
that is related to
revenue performance.”
The company has also explained its
logic for offering such a high value for 2G spectrum:
”Spectrum is a national asset and a
scarce resource. Under the present policy, which was
evolved to develop this business in 2003, this critical asset is liable
for allocation at a hugely
concessional rate to existing
operators and new entrants in a business which is perhaps the
most profitable and prosperous in the world today.”
The Economic Times
Telecom war flares up, Ambani slams COAI
Escalalting the ongoing telecom war, the Reliance Communications chairman
Anil Ambani on
Monday fired the first salvo against
the Cellular Operators Association of India (COAI) — the
body of GSM players — against its move to challenge the new spectrum
norms.
“COAI does not represent the telecom
industry and their propaganda on spectrum allocation
was misleading. Initially, five companies out of nine took the matter
to the apex tribunal TDSAT.
I believe, two of them have already
dissociated from the case,” Ambani said.
Aircel, Spice Telecom, Idea Cellular, Bharti Airtel and Vodafone-Essar had
moved the TDSAT
under the banner of COAI, challenging the Centre’s
new norms on spectrum allocation and
allowing usage of dual technology. Aircel and Spice
Telecom have since then withdrawn cases
against the Department of Telecom. “Others have also realised
that this was an unwarranted,
unnecessary and misguided action by the COAI, against the future of
competition,” Ambani
added.
The controversy over spectrum
allocation and dual technology had reached Prime Minister’s
Office, which
sought clarification from telecom minister A Raja on various related issues. On
RCom (which is a CDMA player) entering into GSM and getting spectrum, Ambani said, “The
licences are technology
neutral, they were upheld by Trai and recommended to
the DoT. We
were issued permission to operate on both the platforms and we have
paid a fee of more than
Rs 1,650 crore”.
RCom, Microsoft in $500m IPTV pact
MUMBAI: Reliance Communications on
Monday signed a $500-million contract with Microsoft
Corp to sell
Internet television (IPTV) to customers in
by the Microsoft Mediaroom platform, will
allow it to deliver entirely new, connected and
personalised television
experiences for Indian consumers, with several advanced features.
IPTV subscribers will be able to
watch popular standard definition content as well as high
definition content for the first time in
The Indian Express
New telecom licences: DoT fixes cut-off date
AT&T Global, Hinduja
Group, Videocon, Moser Baer and more than 20 other
companies, which have applied for new telecom licences,
will have to wait longer for foraying into mobile services.
The Department of Telecom has decided
to first process the applications for new telecom
licences made by
companies before September 25.
About 46 companies have put in their
applications of which over 50 per cent have applied after
September 25. The new cut-off date
comes despite DoT announcing that it will take new
applications till October 1.
DoT has decided that those companies, which have applied after
September 25, will be
considered at a later date if any spectrum is left available after processing
the applications
received prior to that date. Others who will have to wait longer include
real estate developer
BPTP Ltd, Ispat Industry and Tulip IT.
As per the policy finalised
by DoT, existing GSM operators which are seeking
additional
spectrum for circles where they are already offering mobile services, will
have the first right to
available spectrum provided they fulfil the new
subscriber-based policy.
Subscriber-linked policy
However, the subscriber-linked
criteria has been increased by up to eight times in some circles
putting out all the existing operators out of contention.
Only Bharti
Airtel and Vodafone Essar
will get spectrum in
policy, GSM operators require only a maximum of 6.2 Mhz
spectrum in most circles, which
means that DoT could technically ask them to
surrender excess radio frequency as operators
such as Airtel and and
Vodafone have already got 10 Mhz in some circles.
Network expansion
The second priority for spectrum
allocation will be given to those existing GSM operators which
have applied for licences to expand their
existing network into more number of circles.
Operators including Idea Cellular,
Vodafone Essar and Aircel
will therefore get spectrum for
starting services in new circles.
The third in the list are those
companies which have applied for dual technologies. CDMA
players including Reliance Communications, Shyam
and HFCL will fall into this category and
will get spectrum for rolling out GSM services. The existing GSM
operators have strongly
opposed this move and have gone to court against this decision.
The fourth category for spectrum
allocation comprises all the other companies which have
applied for new telecom licences before
September 25. This includes Spice Communication,
Parsvnath, Datacom, BPL, Shyam Telelink and HFCL.
Spectrum will be allocated on a first
come first served basis. As per DoT’s estimates,
about 20
Mhz of spectrum will be available in the next two months while
another 40 Mhz is expected
to
be released by the Defence at a later
date.
Business
Line
Auctions unfair, Raja tells PM
Communication minister A Raja has
told the PM that spectrum auctions are "unfair,
discriminatory, arbitrary and capricious". Despite this admission of his
personal view, Raja
squarely blames Trai and the Telecom Commission
for not recommending auctions for 2G
spectrum in two letters, both written to the PMO on November 2.
The letter safely ducks the issue of
how existing operators will get any incremental spectrum
now that the TEC's recommendations, which stiffend the subscriber thresholds have been
accepted by DoT.
Raja was forced to explain his stand
on spectrum allocation, following a letter from the PMO
asking him for a detailed explanation on all spectrum-related
developments.
Contrary to Raja's claim, senior DoT officials had set out auctions as the preferred and
only
legally tenable procedure for allocating new licences/spectrum.
Surprisingly, these
recommendations did not make their way to the note sent by the minister for the
law ministry's
opinion.
Trai also stands vindicated. In its recommendations of August 28,
section 2.39, the regulator
Create Newsletter Mail - TelcomtrackIndia Admin Module Page 25 of 38
http://www.telecomtrakindia.com/trdc/mail_fo.asp?viewfor=imgy
had said: "DoT has not asked for any
specific recommendations on the issue of spectrum
allocation or pricing". It also admitted to "an urgent need to
have a predictable and transparent
roadmap for any new entrant wishing to enter the sector".
In reality, Trai's
recommendation against auctions in Section 2.79 essentially relate only to
existing operators on grounds that they have varying levels of spectrum.
Trai, during the course of its consultation, did not discuss the issue
of spectrum or auctions for
existing applicants at all, so the legal validity of any recommendations
on spectrum, even if
offered, does not arise. COAI has challenged Trai's
subscriber-linked suggestions for spectrum
allocation in the TDSAT on the same grounds: for bypassing the consultation
process.
Raja has informed the PM that DoT's October 19 policy permitting dual technology spectrum
is
also based on Trai's recommendations and
that spectrum will be allocated after "existing
operators receive the same according to their eligibility as also license
holders awaiting initial
spectrum".
Raja also complained about the law
ministry's rejection of his request for legal advice. The law
ministry has said all spectrum-related issues should be sent to the GoM. Raja says this
suggestion is "totally out of context", arguing that a GoM reference is only relevant for new and
major policy decisions.
The intervention of the PM's office
is yet another indication that all is not well with the spectrum
allocation procedure adopted by the telecom ministry.
The Times of