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Telecom department issues final unified licence guidelines

03 Aug 2013 Evaluate

In order to clear the regulatory cloud hanging over roaming pacts among telecom players, the Department of Telecommunications (DoT) of India has issued final unified licence guidelines, which will allow telecom players to enter into roaming pacts in the same or another service area irrespective of the spectrum band held or technology used. However, telecom companies will not be allowed to acquire any customers where they do not hold requisite licences since it would amount to spectrum sharing which isn't allowed, the DoT new unified licence (UL) rules said.

The new unified licence (UL) rules will replace the existing United Access Service Licence (UASL) regime under which operators needed separate licences for each service. Considered as a first step for the telecom industry to prepare it for the next round of growth, the new UL guidelines will be notified within 10 days and also bar cross-holding between mobile phone companies, a move that will impact Vodafone India's holding of about 5% in the country's largest mobile phone company Bharti Airtel. Further, as per the new UL norms, licensee will also have to pay a yearly fee that will be 8% of annual gross revenue for the term of the license which is 20 years from the time of migration to the UL regime.

While, the government said that no licensee or its promoters can directly or indirectly hold any stake in another licensee company that holds spectrum in the same service area. However, present norms allow telecom operators to hold up to 10% equity in another operator in the same circle. It has also asked telecom companies having arrangements contrary to these guidelines to comply new norms within a year and also suggested them to allow greater access to security agencies to monitor phone conversations.   

Companies will be able to move to the UL system even when licences get renewed. However, the companies such as Uninor, Videocon Telecommunications and Sistema Shyam Teleservices that won spectrum last November and this March via auctions will need shift to UL now. In case a company is merging with or acquiring another that has not migrated to the new regime, the merged entity will have to migrate prior to the merger or acquisition.

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