Financial Daily from THE HINDU group of publications
Monday, Mar 29, 2004
Info-Tech - Telecommunications
New licence regime: No favours for existing players
New Delhi , March 28
MUCH to the disappointment of existing telecom service providers, the Telecom Regulatory Authority of India (TRAI) is unlikely to recommend any compensation to them in lieu of the forthcoming unified licensing regime.
According to official sources, unlike the transition to unified access service regime (UASL) wherein the GSM cellular operators were offered compensation by way of reduced licence fees, there may be no such incentive offered this time around.
The telecom operators have been seeking compensation on the grounds that they had paid high entry fees for providing basic, cellular and long distance services, while in the new regime any company can offer all these services by paying a nominal entry fee and picking up a single licence from the Department of Telecommunications (DoT).
They said that the basis for deciding the entry fee for GSM cellular service and the first six licences for basic services was a bidding process.
The entry fee for other telecom services and basic services licences post NTP '99 was fixed by DoT based on TRAI's recommendations.
The main consideration was the ease of entry and to deter the entry of non-serious players.
As a result, the cellular mobile operators and basic operators paid different entry fees for each service area based on bidding; the national long-distance operators paid Rs 100 crore as entry fees while international long-distance operators had to shell out Rs 25 crore.
For UASL, which came into force from mid-November 2003, the entry fee was fixed at the level of fourth cellular operator's entry fee and wherever such operator was not present, the entry fee paid by the existing basic service operator formed the basis.
The telecom operators have stated that before moving to a single licence regime they should be compensated in order to create a level playing field.
However, the authority is of the view that existing service providers, barring UASL's licensed in the year 2003, have the first mover advantage.
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