Reliance Industries (RIL), which holds a treasure of wireless spectrum bigger and faster than all Indian mobile operators put together, but is barred from providing voice services, will be the biggest beneficiary of New Telecom Policy 2011. The policy will allow RIL, which holds 20 MHz spectrum in the high-speed 2.3 GHz band, to offer voice calls.
Current rules prevent those who hold licence for data services ? like RIL ? to use the spectrum for any other service. RIL came to own this stock of spectrum with its acquisition of Infotel Broadband, the only company to win a licence to offer broadband wireless access (BWA) across the country last year. The company has not launched any data service so far.
This is how it will happen: NTP 2011 proposes to segregate licences from spectrum. This means licences won?t define the kind of service an operator wants to provide as is the current practice. Once the new policy is announced by the year-end, RIL can quickly launch voice services with its high-speed BWA spectrum, posing a major challenge to all incumbent operators. It will not need to buy more spectrum through auctions and can start off with both voice and data services.
Telecom minister Kapil Sibal has already spoken in favour of segregating licences and spectrum. Currently, telecom licences are service-specific. For instance, a unified access service licence allows an operator to provide mobile telephony, an internet service provider licence allows one to provide Internet services, a long distance service licence allows carriage of inter-circle calls, etc. This will change with the dawn of Sibal?s NTP 2011. Under it, licences will be service-agnostic, where an operator gets a licence on paying a fixed amount set by the government.
It can provide any service of its choice by buying spectrum at market price. Sub-committees working on the policy too have documented the same.
Contours of NTP 2011 thus put to rest all doubts on whether BWA as a stand-alone (without voice) service is a viable business model. It also scotches all speculation that RIL could buy a mobile operator at a high cost in order to provide telephony.
The company has been bullish on the telecom sector as outlined by chairman Mukesh Ambani at his annual general meeting speeches this year as well as last.
This year, he had spoken of how the company would bring in a digital revolution while last year he had said that RIL’s business model would be asset-light and based on a range of partnerships.