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Vodafone may have to sell $1-bn Bharti stake under new licence rules

The new unified licence norms also clears the decks for Mukesh Ambani-run Reliance Jio Infocomm (RJI) to offer pan-India voice services on 4G spectrum.

Communications and IT minister Kapil Sibal addresses the National Telecom Summit 2013 in New Delhi on Friday Communications and IT minister Kapil Sibal addresses the National Telecom Summit 2013 in New Delhi on Friday
The government on Friday finally unveiled the long-awaited Unified Licence norms allowing telecom companies to offer mobile and fixed-line services using any technology. This clears the decks for Mukesh Ambani-run Reliance Jio Infocomm (RJI) to offer pan-India voice services on 4G spectrum.

The new norms will enable the introduction of Internet telephony and Internet TV services besides allowing companies to offer intra and inter-circle roaming. But the rules bar operators from acquiring subscribers in areas where they don't own licences.

Companies will have to migrate to the new licencing regime upon expiry of their current permits besides paying a licence fee of eight per cent of annual revenues from telecom services.

The new licences will be valid for 20 years and renewable for another 10 years. The licence agreement, unveiled by department of telecommunications, bars service providers from holding any beneficial stake in another operator in service areas they operate.

In the event of holding or obtaining access spectrum, no licensee or its promoter(s) directly or indirectly shall have any beneficial interest in another licensee company hold-ing access spectrum in the same service area.

The move impacts companies like Reliance Communications (RCom) and Vodafone which have permissible stakes of less than 9.9 per cent in other telecom firms under the previous licencing regime. RCom has a stake in Reliance Telecom (RTL), which has a permit for providing GSM services in eight telecom circles, of which six serv-ice areas-Bihar, Odisha, Madhya Pradesh, West Bengal, Himachal Pradesh and Kolkata are common with RCom.

RTL licences are due for renewal in December 2015. Voda-fone also holds around four per cent stake in Bharti Airtel, which is within the permissible limit. Telecom operators opting for Unified Licences will have to pay maximum of Rs 15 crore for provid-ing all telecom services while there are separate one-time entry fees for firms opting to provide select services like national long distances and Internet serv-ices. Applicants opting for such licences will have to provide maximum performance bank guarantee of Rs 220 crore.

Currently, companies need to get a separate 2G, 3G, 4G licence to offer different types of services such as Internet, mobile and long distance calls. Besides, now tele-com companies will be able to offer all nine telecom services by paying an entry fees of Rs 15 crore.

Courtesy: Mail Today