A big question mark hangs over the entry of global telecom major AT&T into India with the Telecom Regulatory Authority of India (Trai) on Wednesday asking the department of telecommunications (DoT) to put in abeyance grant of any telecom licences till a comprehensive set of recommendations are not furnished by it on issues of spectrum pricing and consolidation in the sector.
The move would also delay foray into mobile services by domestic biggies like DLF, Sterlite group and Moser Baer.
The Trai’s missive is in response to a July 22 communication by the DoT asking the regulator whether further licences should be issued under the policy of no-capping or be stopped considering the spectrum scarcity and the fact that there’s sufficient competition in the sector. FE had exclusively reported the matter in July 27 edition.
While putting a temporary freeze on the grant of any licence, Trai has said since there are three different DoT references before the regulator and as the issues are inter-linked, the regulator would undertake a comprehensive exercise covering all the issues after a detailed consultation process.
Grant of any fresh licence should be kept in abeyance until it furnishes its recommendations and the government arrives at a decision on them, it has said, adding the DoT could go ahead with issuing more licences only on approval by the court.
Currently, there are 343 applications for licences, filed between September 26, 2007 to October 1, 2007, pending before the DoT. So far, the department has issued licences on applications submitted on or before September 25, 2007. It has issued 122 licences, including real estate and technology firms with no telecom experience. A total of 575 applications have been filed by 46 companies till October 1, 2007.
Trai currently has two other references from the DoT. While one relates to the report of the spectrum pricing committee, which also deals with the issue of spectrum sharing and trading, mergers and acquisitions and de-linking licences from spectrum, the second reference is regarding an earlier Trai recommendation on auctioning all spectrum barring in 800, 900 and 1800 Mhz. Since all the issues are inter-linked, Trai would give a consolidated recommendation on these, which is expected to take time.
The genesis of the present crisis is in the 2007 recommendation of Trai which was also upon DoT’s reference when the regulator reiterated the continuance of the no-capping policy, which saw a huge rush of applications later that year.
Seeing the rush, communications and IT minister A Raja had administratively put an ad-hoc cut-off date on September 24, 2007 that no further applications would be admitted after October 1, 2007. Later Raja awarded licences to only those companies which had submitted applications till September 25, 2007.
It was the grant of licences to companies like Swan Telecom, Unitech Wireless, Loop Telecom, and S Tel at a price discovered in 2001 that put Raja in the dock, with critics alleging a scam worth more than Rs 60,000 crore.
The DoT and Raja recently received a big jolt when the Delhi High Court pulled up the DoT for fixing a cut-off date of October 1, 2007 for granting licences and then arbitrarily allocating licences to only those companies which applied till September 25 that year.