The Minister of Communications and IT, Kapil Sibal held a roundtable with all the Telecom Operators in India. Here is a brief excerpt on who said what in the meeting and eventually we will analyze what was the tone of the Telecom Minister – Kapil Sibal.
2G / 2.5G Spectrum Limits and Future Allocations:
Currently TRAI has suggested 6.2Mhz as the committed spectrum for GSM telcos beyond which an excess charge would apply. DoT will accept it or not will be seen very soon. Here is how various stake holders responded.
- Reliance Communications agrees with TRAI.
- Vodafone disagress and believes that this is artificial.
- Airtel believes all spectrum allocated is in line with the policy, rules and regulations and the policy is for 15Mhz, so a 6.2Mhz cap should not apply. They do not believe that those with 4.4Mhz waiting for 6.2 should be given priority as allocation criteria (subscriber linked) applies to all.
- Idea Cellular echoed Airtel’s views.
- Aircel stated that 6.2Mhz should be awarded immediately or as and when the telcos reach the subscriber linked criteria. Telcos who have received start-up spectrum and have met the subscriber linked criteria should be given priority.
- Sistema Shyam / MTS contracted spectrum (5MHz for CDMA, 6.2 Mhz for GSM) should be given without any extra charge.
- Uninor believes that it is the government’s contractual obligation to award up to 6.2Mhz of spectrum based on subscriber linked criteria.
On De-linking of spectrum from licenses
De-Link the entire Spectrum from Wireless Operating License
- Vodafone supports this but believes the recommendation is incomplete at this time. It should not only be applicable in the future.
- Airtel highlighted that spectrum sharing/trading should be supported – other than auctions, this can help determine market value of spectrum.
- Idea Cellular supports de-linking of license from spectrum but suggests that licenses should be perpetual as long as a license fee is paid and that spectrum should be given to those who assign it the highest economic value.
- Reliance Communications and Infotel Broadband welcomed the move.
Spectrum Usage Charges
Operators pay a charge to the Government in various forms – On Revenues, USO, etc.
- Bharti Airtel wants a level playing field as ig merely holds 10% of the allocated spectrum but pays 31.84% of the total spectrum charge collected by the Government. Further to enhance Data / Wireless Broadband services, the use of leased line capacities and bandwidths should be allowed as a pass-through and therefore subtracted from gross revenue.
- Idea does not support an escalation spectrum usage charge regime.
- RCOM supports TRAI’s recommendation (May 2010) of the implied increase here and, in fact, proposes steeper increases at 2% beyond the limit of 8/10Mhz.
Mergers & Acquisitions:
Should their be regulations for M&A ? How do we go about this ?
- Vodafone suggested the lifting of all barriers here and allowing a free market to decide the business.
- Idea Cellular – current regulation on M&A is outdated and that spectrum should be allowed to move with the entity in question. Idea suggests capping market share at 40% based on subscriber or VLR data depending on the number of players.
- Airtel and Aircel supports M&A
- RCom – Supports TRAI recommendations which are not very industry friendly at all.
License Fees
Should be linked to income or should be uniform ?
- Vodafone supports the reduction of license fee to 6% but suggests this be implemented immediately.
- Bharti Airtel supports the introduction of a uniform license fee across services (NLD, ILD, voice) to avoid misrepresentation of revenue to avoid paying the fees.
- Idea boldly said that the USO fees of 5% is meaningless as the fund has not been utilized at all
- RCom -link it to income. Re-think on USO fees.
- Aircel – Uniform License Fees.
Rollout Obligations – Nobody supported the idea od rollout obligation based on Habitation as proposed recently.
In short, every operator said what was more beneficial to his company, in-line with expectations 🙂 After listening to Nira Radia tapes, I have lost faith and respect for the Telecom regulator – TRAI since members appear to be influenced by lobbyists and I support the views of former Idea Cellular CEO, Sanjeev Aga that they need a overhaul in Telecom Regulatory.
Stay tuned for update on the views of Telecom Minister after this roundtable which will be reflected in his National Telecom Policy of 2011.