The Telecom Regulatory Authority of India (TRAI) plans to fast-track the process of framing an exit policy for players looking to surrender their telecom licences.
Earlier, in January this year, the regulator had, at the behest of the Department of Telecommunications, issued a pre-consultation paper, ?Exit Policy for Various Telecom Licences?. Stakeholders were asked to submit their comments on the paper by end-January. Based on their comments, TRAI floated the ?Draft Response on Exit Policy for various Telecom Licences?.
The paper states that the proposed exit policy would be framed for four licence categories as given below:
? The 122 unified access service (UAS) licences that were issued on or after January 10, 2008
? The basic, cellular mobile telephone service and UAS licences issued prior to the aforementioned date
? All other licence categories, such as natioanl long distance (NLD), international long distance (ILD) and internet service provider (ISP)
? Future licences.
The stakeholders have made recommendations for the following areas:
? Whether partial exit from the sector should be allowed: The stakeholders have recommended that partial exit should be permitted. Operators should be allowed to choose the circle (or circles) they wish to exit from and whether they want to fully or partially surrender the spectrum they hold. A few stakeholders have suggested that a partial exit clause should be put in place for players with spectrum beyond the contractual limit of 6.2 MHz for GSM players and 5 MHz for CDMA operators. Also, an operator may want to surrender the entire spectrum it holds without giving up its UAS licence for the circle in question. In this case, the stakeholders have suggested that the licensee should be charged as per the conditions specified for the NLD and ILD licence categories, besides the minimum entry fee of Rs 25 million for a pan-Indian licence.
? Whether the entry fee should be refunded: The stakeholders have suggested that the entry fee should be refunded on a pro rata basis, subject to the operator meeting licence conditions. Moreover, an operator should be permitted to exit after providing ample notice to users to ensure non-disruption of service. The operator must also clear all pending dues pertaining to the licence fee, spectrum charges and penalties (in case of non-fulfilment of roll-out obligations).
? Whether the bank guarantees ought to be released or not: The majority of the stakeholders believe that the bank guarantees should be released once the operator exiting the sector clears all outstanding dues and penalties. If the operator is unable to meet the roll-out obligations, a certain percentage of the performance bank guarantee should be deducted. And, in case the spectrum is bundled with the licence, neither the entry fee nor the bank guarantee should be refunded.
? The appropriate time frame for the company to exit the telecom space: The stakeholders have suggested a time frame of 2 to 12 months for an operator to exit the business. The respondents have also suggested that an operator be allowed to re-enter the space at any time.
Taking account of these suggestions, TRAI has stated that, as per the Supreme Court?s verdict in the 2G spectrum case, the licences listed under the UAS category will be cancelled within four months. Therefore, no exit policy is required for the same.
Similarly, for the second category, TRAI recommends that the companies, which have been operational for several years, and have an established network and user base will not require an exit policy.
Meanwhile, companies holding an NLD, ILD, ISP, or other licence are required to pay lower entry fees as compared to other categories and are not time-bound to surrender their licence. In this context, a separate exit policy is deemed unnecessary.
TRAI has recommended that all future licences should be unified licences, subject to the guidelines already specified by the regulator in January and February 2012. As per these conditions, the entry fee for a pan-Indian licence is Rs 200 million for metros, Rs 20 million for Category A circles, Rs 10 million for Category B circles and Rs 5 million for Category C circles.
Also, the regulator has said that the conditions for surrendering licences are already highlighted in the guidelines and that a separate exit policy under the unified licensing regime is not necessary.
In sum, TRAI?s proposed recommendations include:
? A separate exit policy is not required and the entry fee for the licences will continue to be non-refundable.
? The current licence conditions specifying that a service provider can surrender its licence by providing a notice a minimum of 60 days in advance will continue to be applicable.
