DoT may seek Ministry help for verifying new
applicants
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To
prevent violation of cross holding norms by companies |
Identity
check
Plans to
put in place a
lock-in period for about three years to retain equity structure.
No
merger or
acquisition would be permitted during the lock-in period and also till the
roll-out obligations are met.
Thomas
K. Thomas
As per DoT
norms, no single promoter can hold equity in more than one telecom
company in a single circle. Concerns have been raised that some of the
companies, which have put in their applications for a licence,
may be acting as proxies for existing operators.
“Since DoT
is not an expert in this matter, it is being proposed that a list of all
existing operators and new applicant companies with their shareholding pattern
may be forwarded to the Ministry of Corporate Affairs. They can examine whether
any of the applicants violate the substantial equity criteria or check if the
source of funding is doubtful,” said a DoT official.
In order to weed out any
non-serious players, DoT is also looking to put in
place a lock-in period for about three years during which the applicant company
cannot change the equity structure.
No merger or acquisition would be
permitted during the lock-in period and also till the roll-out obligations are
met. The department may impose a severe punitive measure in case the roll-out
obligations are not met.
TRAI
suggestions
On the telecom regulator’s
recommendations for additional spectrum allocation, DoT
officials said that the Government is likely to accept the suggestion that
there be a cap at 10 Mhz per
operator for GSM players and 5 Mhz for CDMA operators
beyond which the operators may be asked to pay a charge.
DoT may also accept TRAI’s suggestion to increase the subscriber base required
to be eligible for additional spectrum. However, it may also put a cap on
spectrum in the event of a merger between two companies.
While TRAI had not recommended any
such cap, DoT officials said that this may adversely
boost the asset value of the merged entity against the interest of other
operators.
M&A
norms
Further tightening the merger and
acquisition norms, DoT may not allow any two
companies whose combined market share is more than 30 per cent. TRAI had
suggested that this limit be raised to 40 per cent.
An internal DoT
document, however, suggests that any operator who already has more than 30 per
cent stake may not be allowed to merge with any other unified access service
provider in the same circle.
DoT may also continue with the
existing norms for preventing cross holding, which do not allow any single
company to hold more than 10 per cent stake in two different telecom operators
in the same circle. TRAI had suggested that up to 20 per cent may be allowed on
a case by case basis.
On the issue of mixed technology
by a single company, DoT officials said that if any
operator wants to offer both GSM and CDMA based services, then
it may be asked to pay a one-time entry fee if the total quantum of spectrum
held by the company is more than 15 Mhz.
Source: The Hindu Business Line
According to the latest data released by the Cellular Operators Association of India (COAI), Bharti Airtel added 2.06 million mobile users in September, taking its subscriber base to 48.88 million by the end of September. Vodafone Essar, its nearest rival in the GSM space, added 1.54 million users, taking its total subscriber base to 35.66 million.
State-run BSNL and MTNL added 5,98,804 and 43,030 new users, respectively, taking their respective user base by the end of September to 30.30 million and 2.77 million. The market share of both the state-run operators dropped marginally in September, whereas it went up for all private operators.
Idea Cellular had 18.67 million mobile phone subscribers at the end of September after an addition of 8,00,904 new subscribers during the month.
Bharti Airtel remains the leader with a market share of 31.88%, followed by Vodafone Essar (23.26%), BSNL (19.77%), Idea (12.18%), Aircel (5.24%), Reliance Telecom (2.4%), Spice (2.27%), MTNL (1.81%) and BPL (0.75%).
Among circles, the overall subscriber base in
Source:
The Financial Express
Deepak Kapoor
Currently and in the future, Indian telecommunications and economic development goals will continue to rely heavily on increased use of wireless networks due to low penetration of wired networks. Till now, the sector has progressed despite the haphazard planning and inadequate spectrum allocation policy of the country that failed to anticipate the demand for this limited resource. The matter has now come to a head with an astonishing 250 plus applicants ranging from diverse conglomerates to real estate companies having filed for new mobile access licences. This is due to the current licencing policy no longer putting any restriction on the number of players per circle.
In the emerging world of anytime, anywhere communications needs, spectrum is a prerequisite for a diverse range of services such as commercial mobile voice and data services, broadband wireless services, terrestrial broadcasting services, mobile satellite services etc. These services will require higher amounts of spectrum due to growing demand for higher data rate services in all environments ranging from stationary to highly mobile with the same quality of service. On the other hand, heightened emphasis on domestic security, need to foster national priorities such as space programmes, cooperative international science and technology efforts, providing education and health to users in rural areas etc are the government priorities. The commercial spectrum demands made by the industry are real but need to be balanced with these government drivers for more spectrum.
These seemingly conflicting demands for a limited amount of spectrum can be resolved with a well discussed and agreed spectrum roadmap involving industry stakeholders. It will have to involve a combination of approaches encompassing increased spectrum sharing, improving efficiency of already allocated spectrum, spectrum reallocation and market-based spectrum pricing. The ‘optimum’ spectrum pricing, when reflective of market value rather than coverage of just administrative costs, is the key to solving the existing industry dilemma as it provides the economic incentive to ensure efficient spectrum usage. This would best be made possible if the policy is uniformly applied across both public and private sector so as to provide the same incentives to use spectrum efficiently and to also secure support of the Industry to promote efficiency and facilitate required availability of this scarce resource. While spelling out the new roadmap, policy makers also need to pay heed to the commitments made to the existing licencees as changing the rules of the game while the play is on has never aided the cause of any country or sector looking to attract investments.
The world is watching India now for its next move on this tricky spectrum issue and in order to build on the ‘India Rising’ story, it would be crucial to announce a well deliberated spectrum policy roadmap that can hold forth on principles that encourage transparent and efficient usage of this scarce national resource by all users.
—The author is managing partner, PriceWaterhouse Coopers
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Panel allows
GSM, CDMA within same licence |
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BS Reporters / |
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In a move which paves the
way for Reliance Communications to become a pan-India GSM player, the Telecom
Commission is learnt to have cleared the recommendation of the telecom
regulator permitting existing licensees to use alternative technology by
allocating them dual spectrum. |
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In simple terms, it means a CDMA players like Reliance can also operate GSM services
and get the required spectrum from the government within the same licence. |
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Earlier, they were allowed
spectrum either for CDMA or for GSM within the licence.
However, now they have to pay an amount equal to the entry fee of a UASL licence (over Rs 1,680 crore for a pan-India licence)
to get the spectrum as recommended by the Telecom Regulatory Authority of
India (Trai). |
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The Commission’s decision,
however, has to be cleared by Communications Minister A Raja. |
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Reliance, which is a
pan-India CDMA player, had made a request to the government in February 2006
asking for GSM spectrum in over 15 circles across the country under its
existing licence on the 1800 MHz band. |
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The company already
operates GSM services in eight circles, including Orissa,
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Following its spat with
technology provider Qualcomm on high royalty payments for the proprietary
technology, the company had announced it preference for the GSM mode. |
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The Reliance Dhirubhai Ambani Group has also
applied for a fresh pan-India UASL licence through
two companies — Swan Telecom and Cheetah, in which it has less than 10 per
cent equity stake. It is amongst the 30 companies which recently put in their
applications. |
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Analysts say the move was
made primarily as an alternative plan in case the government decided to
disallow allocation of dual spectrum. |
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It is also learnt that the
Telecom Commission has rejected a proposal which entails that the issue of
reservation of spectrum for expansion of networks of existing operators,
should be referred to the Trai. The law ministry is
believed to have suggested the matter be referred to the Trai
for its opinion. |
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On a proposal to hike the
revenue share percentage steeply beyond 6.2 MHz, the Commission decided that
a final decision would be taken only after the Telecom Engineering Centre
(TEC) gave a final report on changes in the subscriber criterion for
allocation of additional spectrum. |
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Trai had recommended the subscriber criterion be changed
substantially for allocation of additional spectrum, a move which has been
opposed by GSM operators. |
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The government has referred
the regulator’s recommendation in this regard to the TEC. |
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The Commission has also
cleared Trai’s recommendation to segregate
subscriber base and annual gross revenue (AGR) into wireline,
GSM and CDMA. |
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This has been done so that telcos using dual spectrum can determine the revenue
share to be paid by them (as spectrum charges) which varies according to the
circle area. |
Source: Business Standard
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BSNL staff to go on nation-wide dharna tomorrow |
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Telecom
News dated 11-10-2007