Telecom Commission delinks Unified Licences from spectrum

NEW DELHI: Communications and Information Technology Minister Kapil Sibal said today that UAS licences linked with spectrum will no longer be awarded and all future licences will be Unified Licences and allocation of spectrum will be delinked from the licence.

Addressing a press meet, he said the Telecom Commission had considered the Recommendations of Telecom Regulatory Authority of India on ‘Spectrum Management and Licensing Framework’ of 11 May 2010 along with its further recommendations of 8 February 2011, clarifications of 3 May 2011 and response of 3 November 2011.

The Commission had said that spectrum, if required, will have to be obtained separately. A final view on implementation of the Unified License Regime would be taken after receipt of detailed Guidelines and Terms & Conditions from Trai for Unified Licence including migration path for all existing licence(s) to Unified Licence.

The Department of Telecom had recommended that in the event of any auction of spectrum pending finalisation of the Unified Licensing Regime, UAS licence without spectrum may be issued which could be subject to a requirement to migrate to Unified licence as and when the regime is put in place. Detailed guidelines for such UAS licence without spectrum would be finalised after receipt of recommendations of TRAI in this regard.

There will be uniform licence fee across all telecom licenses and service areas which will progressively be made equal to 8 per cent of the Adjusted Gross Revenue (AGR) in two yearly steps starting from 2012-13.

The licence fee and spectrum usage charges payable by each such licensee shall be on actual AGR, subject to a minimum presumptive AGR. This minimum figure would be reviewed by Trai every year.

A decision on the recommendation to bring IP-I Service Providers under licencing regime who are currently unlicenced passive infrastructure providers has been deferred for further examination.

A rapid comprehensive techno-economic study will be carried out by DoT to examine issues relating to increase in coverage and tele-density in rural areas while at the same time ensuring sustained quality of service and also to examine the adequacy of USOF mechanism alone to achieve these objectives and the need for augmenting USOF schemes with appropriate direct incentivisation of TSPs for rural rollout.

The validity of existing UAS (& CMTS and Basic services) licences may be extended for another 10 years at one time, as per the provisions of the extant licensing regime with suitable Terms & Conditions so as not to imply automatic continuance of existing license and related conditions including quantum and price of any spectrum allocated.

On extension, the UAS licensee will be required to pay a fee which will be Rs 20 million for Metro and ‘A’ Circles, Rs 10 million for ‘B’ circles and Rs 5 million for ‘C’ circles. This fee does not cover the value of spectrum, which shall be paid for separately. While extending the licence, the licensee shall be assigned spectrum only up to the prescribed limit or the amount of spectrum assigned to it before the extension, whichever is less. Spectrum assigned by the Government to the licensee in excess of the prescribed limit shall be withdrawn.

The need for refarming of spectrum has been accepted in-principle. Further steps will be taken after receipt of Trai’s recommendations in this regard.

The prescribed limit on spectrum assigned to a service provider will be 2X8MHz/ 2X5MHz for GSM/ CDMA technologies respectively for all service areas other than in Delhi and Mumbai where it will be 2X10MHz/ 2X6.25 MHz. However, the licensee can acquire additional spectrum beyond prescribed limits, in the open market, should there be an auction of spectrum subject to the limits prescribed for merger of licences.

Decisions on all matters relating to One Time Spectrum Charge including pricing of spectrum in cases of M&A and Spectrum Sharing will be taken separately.

Spectrum usage charges were revised in 2010 by the Government and the matter is sub-judice. Further action will be taken by DoT after the matter is decided by the court.

The broad guidelines in respect of intra-service area merger of CMTS/UAS licences will include merger up to 35% market share of the resultant entity through a simple, quick procedure. However, there may be a need to consider cases of merger beyond 35% market share in certain circumstances without breaching the 25% cap on GSM spectrum/ 10 MHz for CDMA spectrum holding in any service area. Recommendation of TRAI that such cases will be considered up to a market share of 60% has been taken note of. In order to ensure clarity on the circumstances and extent to which merger above 35% limit would be permissible, detailed transparent criteria will be prescribed/ adopted after receipt of TRAI’s recommendations and after due consultation with the appropriate authorities.

If the total spectrum held by the resultant entity is beyond the limits prescribed after merger, the excess spectrum must be surrendered within one year of the permission being granted. The Government may prescribe the band which will be required to be surrendered in accordance with spectrum refarming policy to be announced separately.

The duration of licence of the resultant entity in the respective service area will be equal to the higher of the two periods on the date of merger. This does not however entitle the resultant entity to retain the entire spectrum till the expiry of licence period.

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