Government proposes to renew telecom licences every 10 years

In a move that may make telecomservices expensive, the government is likely to give freshlicences and renew the old ones for 10 years instead of 20years now after the new telecom policy 2011 comes into effect.

This coupled with higher price for spectrum may force theoperators to charge more for almost all services especiallymobile and broadband to realise cost-based tariffs.

Till now the operators were getting the licences for 20years bundled with start-up 2G spectrum of 4.4 Mhz and now theservice providers would have to give market-based price forspectrum as the same has been delinked from the licence.

"The telecom companies under the (proposed) NTP-2011 willhave to file an application 30 months prior for the renewal ofthe telecom licenses and it (the licence) will be renewed for10 years unlike 20 years as of now," Telecom Minister KapilSibal said.

The service providers were, however, divided on the issueof reducing the periodicity of licences to 10 years with newoperators welcoming the proposal and some of old operatorsopposing it.

The minister also indicated that merger and acquisitionrules may be liberalised further but said that at least sixoperators would have to be there in every circle to ensuresufficient competition in the sector.

"The Department of Telecom (DoT) has initiated theprocess for formulating comprehensive NTP-2011 for which aninternal committee has been constituted to look at variety ofissues ranging from licencing to spectrum pricing and M&As,broadband to restructuring of DoT, among others," he said at apress conference on DoT's 100-day action points andachievements.

Asked whether operators would be allowed to sharespectrum, the minister said that the proposal was underconsideration and the DoT may allow it under certainconditions.

Sibal also said that all these proposals, oncefinalised, would be sent to the Telecom Commission for finalclearance.

On the issue of pricing of spectrum, as suggested bytelecom regulator TRAI recently, Sibal said a final decisionis yet to be taken.

TRAI had in February this year proposed over six timeshike in 2G spectrum and also one-time price for additionalspectrum beyond 6.2 Mhz held by some of the operators.

The NTP-2011 is likely to be finalised by this year end.