Sibal unveils renewal terms for telecom licences

Sibal unveils renewal terms for telecom licences

New Delhi: In what could lead to a redrawing of the Indian telecom sector in three years, minister for communications and information technology Kapil Sibal said on Monday that an operator would have to apply 30 months in advance of the expiry of its licence for renewal. The renewed licence will only be valid for 10 years, half the lifespan of existing ones.

On the occasion of his 100-day agenda coming to an end, Sibal also announced at the press briefing that the present licensing system itself will be recast into four categories of licences, including a unified licence and a broadcasting licence.

Sibal also promised to liberalize the existing mergers and acquisitions norms that govern telecom operators on the lines of what was proposed by the Telecom Regulatory Authority of India (Trai) in May last year. Trai had suggested that there be a minimum of six telcos in every circle, including one government-run operator.

Presently, one telco cannot hold more than 10% of another operator in the same circle, while new licensees are not allowed to sell their equity within three years of getting the licence.

Trai also suggested there be a 25% limit on the quantum of spectrum held by an operator in a circle.

Most of the new proposals will be part of the New Telecom Policy 2011 (NTP 2011) that will replace the NTP 99 that’s currently followed. The NTP document is essentially a framework document based on which telecom policy is determined in the country. The policy will be ready by the end of the year, Sibal said.

A panel has been constituted with additional secretary (telecom) and adviser (technology) as co-chairmen and deputy director generals as members to put together NTP 2011. Two rounds of meetings have already taken place since then and eight teams have been constituted to work on specific areas.

As was suggested by Trai, Sibal also proposed to delink spectrum from the licence as is the case in most developed telecom markets globally. He also said that spectrum sharing would be allowed, but in a conditional manner.

In a bid to bring one of the more controversial aspects of the telecom sector—spectrum—under greater control, the minister said that there would be a National Spectrum Act. The drafting committee, headed by retired Supreme Court judge Shivraj V. Patil, will be set up soon, he added.

“The committee is likely to be a six-member one with help from many departments across the government," a senior department of telecommunications (DoT) official said, requesting anonymity.

Sibal also said that the draft National Frequency Allocation Plan (NFAP) has been finalized. NFAP is a document showing clear demarcations for every megahertz (MHz) of spectrum in the country and what it is meant to be used for and by whom. The ministry is in discussions with various arms of the government, including the ministry of defence, space department, ministry of information and broadcasting and some public sector enterprises to get them to vacate spectrum needed for mobile and other essential services. DoT is also in discussions with Power Grid Corp. of India to free up around 10-12 MHz of spectrum in various circles.

Sibal said DoT was still looking into pricing mechanisms for the spectrum. He also said that there would be regular audits of spectrum to check whether telcos are using it efficiently and not misusing what is a scarce national resource.

On security issues, he said the “proposal for establishing a central monitoring system has been put up for approval of the competent authority", adding that Research in Motion, maker of the BlackBerry device offered a solution on “the issues pertaining to messenger services", which is being examined.

Amendments to be made to telecom licences regarding security were sent to the home ministry for approval on 24 March, while security concerns over third-generation services and telecom equipment will be sorted out soon, Sibal said.

One key element of the minister’s 100-day agenda had been the filling of vacant posts in government-run telcos Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd. Sibal said that these are almost complete and some posts have been finalized.

The National Broadband Plan that will look at installing optical fibre across the country is being looked into by a committee headed by Sam Pitroda, adviser to the Prime Minister.

The Wireless Broadband Scheme to provide wireless broadband coverage to about 500,000 villages—leveraging the existing passive infrastructure created for mobile telephony in rural and remote areas—funded by the Universal Service Obligation Fund, has been approved and will be launched soon.