The Telecom Minister will continue to be vested with powers to finalise guidelines for new telecom licenses despite the Planning Commission demanding that such authority be exercised only by the Cabinet or a ministerial panel.
"The guidelines for new licences will be finalised at Ministry level by the Telecom Minister after recommendations are made by the Telecom Commission," a senior government official told PTI here.
The Planning Commission is learnt to have objected to Telecom Minister being made the sole authority to finalise guidelines and demanded that the decision on licences be taken by the Cabinet.The Telecom Ministry is of the view that the condition for implementing and executing ULR remains same as it was approved by the Cabinet in 2003 which authorised DoT to finalise details for ULR implementation with its approval.
The Department of Telecom (DoT) has approached the Cabinet for clearing new licensing regime of Unified Licences as it involved discussion regarding 'Broadcasting Licences' - one of the licence types recommended by Telecom Regulatory Authority of India under Unified Licensing Regime (ULR).
At present, DoT has received final recommendation from TRAI which is to be discussed by inter-ministerial panel and the Telecom Commission.
"No date for Telecom Commission has been finalised yet," the official said.
Telecom Secretary R Chandrashekhar on Thursday had said that DoT will take two to three months period to work out details of Unified Licences.
New telecom companies looking to start business in India, specially the companies whose permits have been cancelled by Supreme Court, will have to take Unified Licences.
These new licences will be different from existing telecom licences for mobile telephony that were issued with bundled spectrum at Rs 1,658 crore for pan-India operations.
New companies may have to pay minimum of over Rs 18,000 crore for getting spectrum apart from licence fees which is yet to be finalised.
For Unified Licence framework, Trai had recommended that there shall be three levels, namely National level, Service area level and District level with one time non-refundable entry fee ranging between Rs 15 crore to Rs 10 lakh.
New analysis shows telecom tariff to rise at least by 26 paise - Economic Times
"TRAI's assessment does not include the cost of license extension in addition to the cost of spectrum to be auctioned. Taking into account these two factors only, EY-COAI estimates that the impact on cost per minute will be more than six times the 4.4 paisa ( for FY'13)," Partner in member firm of EY Prashant Singhal said in its analysis of spectrum base price recommended by telecom regulator TRAI.
The analysis comes in back drop of steep spectrum base price of Rs 3,622 per unit of airwaves to be auctioned recommended by TRAI. This price has earned sharp criticism from industry.
Inter-ministerial panel at Department of Telecom, the Telecom Commission in its recommendation to EGoM has said that balance needs to be struck between spectrum price and three other critical factors -- revenue to government, tariff to consumer and viability of investment and continued attractiveness of the sector while taking decision.
The Commission asked TRAI to come up with analysis on impact of spectrum price recommended by it in each of 22 telecom service area and re-look at the points made by industry.
The report jointly prepared by telecom industry body COAI and EY has claimed that TRAI has made false assumption while calculating impact of spectrum price on telecom tariffs.
"Trai has done simple calculation to arrive at cost impact. It has divided the amount of spectrum to be auctioned and divided it by total number of minutes being used by all telecom subscribers which is incorrect," Partner for Advisory service at E&Y Bharat Bhargava said.
He added that Trai missed to consider spectrum quantity that is being used to support 332 minutes of telecom network used by a subscriber in a month where the revenue comes from only outgoing minutes.
"So one factor of TRAI getting low number is due to less spectrum being put in numerator," Bhargava said.
The analysis said that TRAI has assumed that minutes of usage for telecom services by subscribers will grow around 160 per cent over a period of 20 years (2012-2032) which is contrary to historical trends, which indicate that MOU per subscriber have been falling over the last few years.
"Industry reports indicate that an average tariff increase of around 20 per cent by leading Indian operators in second quarter of 2011 resulted in a sharp decline in MOU in the range of 2.6 to 6.9 per cent," the report said.
The report further said that TRAI assumption of MOU per subscriber will grow 84 per cent during the 20 year period, is in contrast to the declining trend seen over the last 3-4 years.
Singhal said that there will be also significant impact on operator costs and consumer tariffs.
"The substantial payout for spectrum may compel the operators to raise further debt and strain their already leveraged balance sheets," he said.
TRAI is expected to discuss its analysis with Department of Telecom on Monday before submission to EGoM.
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