RComm, TTSL seek licence extension by 20 more years

The country?s top two CDMA operators, Reliance Communications Ltd and Tata Teleservices Ltd, who got the government nod last year to start GSM services for an additional licence fee, have sought a 20-year extension of the licence period for the same amount.

The demand comes as the department of telecommunications (DoT) is in the process of extending the licence period of the operators by 10 years. The operators were given licences in early 90s for a period of 20 years, and in some cases, the renewal would begin in the next few years.

Since the licences of RComm and TTSL are from 2002, they still have many more years to seek a renewal; still the matter has gained significance because of a DoT stance. DoT wants the renewal for all licence holders to happen in one go, since later this year, 3G licences would also be given. The department wants the period of the two (2G and 3G) licences to become co-terminus.

Last year, when RComm and TTSL were given permission to give GSM services under DOT?s crossover policy, they had to pay an additional licence fee. RComm paid around Rs 1,651 crore for the 22 circles it got and TTSL a little less since it had then services in 19 circles. Since RComm had GSM services in six circles, the government later refunded it around Rs 200 crore.

Though the formula for payment for extension of the licence is yet to be finalised, according to one draft proposal, DoT had suggested a fee of Rs 825 crore for renewing a licence for 10 more years.

According to DoT officials, the two companies have sought that in case the government does not agree to extend their licence period for the same amount, then the excess amount be returned to them along with interest.

Officials told FE that the demand of RComm and TTSL is likely to be rejected as the payment of the additional licence fee for GSM services was in no way linked to an extension of the licence period. ?All the companies that have been issued in-principle approvals for usages of dual technology spectrum had accepted the terms and conditions of the offer made through in-principle approvals,? an official said.

It was only after acceptance of the offer and payment of requisite fee by the companies that amendments in the respective unified access service licences for usage of dual technology spectrum were effected, the official said.

However, the two operators feel that they have a valid case and are sure of a favourable verdict as the time for renewal nears.