The fate of the global telecom major AT&T?s India entry as well as industry biggies like DLF, Sterlite group and Moser Baer?s entry into the telecom sector would now be decided by the Telecom Regulatory Authority of India (Trai).
In 2007, these companies had applied for telecom licences within the cut-off date of October 1, 2007. However, seeing the huge rush of applications, the department of telecommunications (DoT) subsequently decided to grant new licences only to those firms which had applied before September 25, 2007. Since then, around 343 applications, including the ones mentioned above, have been lying with the DoT.
In a significant move, the DoT has now asked Trai to furnish its views whether under the government’s policy of no-capping of the number of players in a circle, licences should be granted to these companies or keeping in mind the scarcity of spectrum the government reviews the no-capping policy so that the existing providers get enough spectrum to provide good quality of service.
The response of Trai would be very significant since it was a similar reference to it in 2007, to which the regulator had iterated the continuance of the no-capping policy, which saw a huge rush of applications later that year. Seeing the rush, 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 such 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 Rs 60,000 crore.
If the Trai once again endorses the continuance of the no-capping policy, licences would have to be granted to these companies as well as to any other, which subsequently applies. However, seeing the controversy raging last time, the government may have to revise the all-India entry licence fee, which is currently at Rs 1,651 crore. But the DoT missive to Trai doesn’t seek to ask whether the licence fee should be revised or not.
In fact, in its 2007 recommendations, the Trai had said that while there should be no auction of 2G spectrum, licences should be given on the basis of auctions not on a first-cum-first-served applications. This was ignored by DoT while allocating 575 licences to around 120 firms.
Meanwhile, the Chennai High Court has pulled up 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.