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Updated: January 30, 2011 00:17 IST

No free spectrum in future: Sibal

Sandeep Joshi
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Union Communications and Information Technology Minister Kapil Sibal. File Photo
Union Communications and Information Technology Minister Kapil Sibal. File Photo

Scarce spectrum would not be offered free of cost and all operators would have to obtain radio waves through a market-driven process, Communications and Information Technology Minister Kapil Sibal said here on Saturday. He, however, clarified that the new operators who got licences in 2008 would be asked to pay beyond 4.4 MHz start-up spectrum, while the incumbent service providers would have to pay beyond 6.2 MHz radio waves.

Giving the broad contours of the new telecom policy being framed by the Department of Telecommunications (DoT), Mr. Sibal said: “In future, the spectrum will not be bundled with licence... there will be no concept of contracted spectrum and, therefore, no concept of initial or start-up spectrum. Spectrum will be made available only through a market-driven process.”

At present, 4.4 MHz of 2G spectrum comes bundled with a licence, while the operator is entitled to an additional 1.8 MHz after he achieves a certain number of subscribers in a telecom circle. The pan-India 2G licence fee as per the existing policy is Rs.1,658 crore.

“As per the proposed policy, the licence to be issued to telecom operators will be in the nature of ‘unified licence' and the licence holder will be free to offer any of the multifarious telecom services. However, if a licence holder wants to offer wireless services, he would have to obtain spectrum through a market-driven process,” Mr. Sibal explained.

“Any new policy on pricing would need to be applied equally to all players. We need to seriously consider adopting an auction process for allocation and pricing of spectrum beyond the contracted spectrum, while ensuring that there is adequate competition in the auction process,” he added.

Pointing out that the Centre was awaiting recommendations from the Telecom Regulatory Authority of India on spectrum pricing, Mr. Sibal said: “We will be able to design a [new] policy that ensures that existing licence holders get the spectrum they need and are entitled to, while simultaneously ensuring that the government also receives revenues commensurate with the current market value of spectrum.”

Referring to the status of some operators who got licences in 2008 and are being investigated for getting licences fraudulently or for not fulfilling licence conditions, Mr. Sibal said the show cause notices had been issued to certain licensees for cancellation. “Only in respect of the licences that are found valid after the [investigation] process is completed, will the additional 1.8 MHz be assigned on their becoming eligible… but the spectrum will be assigned to them at a price determined under the new policy. In the event of the licences getting cancelled, the dispensation will be under the new policy.”

Instead of various slabs, there would be a uniform rate of revenue share payable by the operators as spectrum charge to the government to provide a level-playing field to all players. “We have also decided to provide adequate spectrum to the operators and we would be seeking a plan of action from TRAI in this regard very soon. However, we will ensure that adequate measures are taken that operators utilise spectrum efficiently and optimally,” he added.

Referring to the controversial New Telecom Policy 1999 that offered licences on a first come, first served basis, Mr. Sibal said it was adopted to generate competition. “But now the competition is here, and there is now a need to move to a new regime… the government would like to make a directional shift from past practice and bring in a fresh policy regarding spectrum. It is important that we ensure adequate availability of spectrum for telecom services.”

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