Two weeks after the Financial Express exclusively reported that the department of telecommunications (DoT) had bypassed the Telecom Regulatory Authority of India (Trai) while recommending that the promoters of the new telecom companies be barred from selling their equity for a period of three years, communications and IT ministeer, A Raja has referred the matter to it. Raja has also referred the proposal cleared by the DoT?s apex policy making body, the telecom commission on November 11, to the law ministry and the ministry of corporate affairs.
?The proposal of the telecom commission came to me and I have referred it to the Trai. I have also referred it to the law ministry and ministry of corporate affairs,? Raja said at the Economic Editors Conference, when FE asked him about the procedural lapse. The matter requires an amendment in the licence conditions and under Section 11 of the Trai Act, requires Trai?s recommendation.
However, officials said that the matter has been referred by the DoT in the reverse order this time. Usually, first the regulator?s recommendation is sought and then the telecom commission deliberates upon it.
Now with the matter being referred to the Trai, it would be months before the proposal would get a final nod. This is because the Trai first needs to come out with a consultation paper, followed by responses from stakeholders and open house sessions before it finalises its recommendations. According to sources, even if it rushes through, the entire process would not take less than 45 days.
The DoT has also referred to Trai the matter of charging the spectrum enhancement fee of 1% across for all operators uniformly and segregation of the revenue payable to the government by 2G and 3G operators as it had majorly differed with the regulator on these issues. Now Trai has time to revisit its earlier recommendation within 15 days.
In another significant development, the DoT has decided to waive off the one year roll out obligations of meeting 10% coverage in each district headquarters and will stick only to the three year norm, which requires 50% coverage. This move, first reported by FE, will benefit new licensees like Swan and Unitech, for whom the first year norm would begin in January, 2009. However, these companies are far from meeting this stipulation.
FE had reported on November 14 that the government was going to ease the rollout obligations for the new telcos since they are in no position to meet the obligations in the licence. ?We want to remove the irritants for all operators hence having a roll out obligation in the first year of operations isn?t feasible?, DoT secretary Siddhartha Behura told reporters.
The government has been facing strong criticism for underselling of the 2G spectrum to the new players and also for ignoring the regulator?s recommendation of auctioning the Unified Access Service Licence (UASL) and alternatively opting for a random ?first come first serve? basis.
On November 12 FE had reported that in a haste attempt of barring the new operators from selling any stake the DoT jumped over the normal course of procedure which makes it mandatory for the DoT to refer any such matter involving the amendment of the licence.