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DoT Loosens Grip On Telcos, Doesn’t Mandate ‘Forced Migration’
The Department of Telecommunications (DoT) has taken a landmark decision to relax the policy regarding migration to Unified License. Companies won’t be forced now to move on to the new regime post expiry of the current license term.
In a move that is sure to enliven telecom companies operational in India, DoT has evidently listened to their sentiments and amended the Unified Telecom License, to do away with the clause which operators claimed mandated ‘Forced Migration‘ to the new regime.
What were the companies contesting?
DoT and TRAI had initially formulated a detailed set of guidelines for Telcos regarding the Uniform License regime which delinks spectrum and operational permits. The initial rule mandated operators to migrate all their telecom licenses to the new regime, on expiry of one in any of their circles, which the industry had dubbed as ‘forced migration‘.
Essentially, if a company had its license up for renewal (which coincidentally, Vodafone and Airtel are currently facing) it had to compulsorily migrate to the new Unified License regime. With the relaxation of this clause, they won’t have to shift all their existing licenses to new regime.
Was migration such a huge problem?
The ‘Unified License’ appears to be a much more streamlined and transparent policy which asks companies to merely bid for the spectrum, whereas they are free to offer as many services they want within that spectrum band they win. Additionally, companies need to pay Rs. 15 Crores (US$ 2.46 Million) to procure this new Unified License. Besides, operators are also required to provide performance bank guarantee of Rs. 220 Crores (US$ 36 Million) and financial bank guarantee of Rs. 44 Crores (US$ 7.2 Million).
Multiple companies have already procured Unified Licenses are gearing-up to offer a whole host of services, a provision, not present in the earlier regime. But, a few companies do have a problem with the new regime. The amended version is surely a relief not just to the telcos, but to pure-play internet service providers (ISP) where most of the players are either mid-size or small companies and can’t afford to shell out large sums of money merely to offer a single service.
The amended clause now reads: “In order to ensure that the UL (Unified License) regime covers all existing licenses, a migration path is offered to the existing licenses to migrate to UL regime. Licenses of any of the existing Telecom Services Provider shall be eligible to migrate to UL with any number of additional services.”
With such a revision, DoT has essentially diluted the power of the Unified License and offered a loophole to telecom companies to stay rooted to the older and much more complicated regime. Do you think it is right on the part of DoT to radically alter such a fundamental requirement?
Image Source | economictimes
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Source: http://www.watblog.com/2013/12/10/dot-loosens-grip-on-telcos-doesnt-mandate-forced-migration/
