The Telecom Regulatory Authority of India (TRAI) has come out with the recommendations on ?Terms and Conditions of Unified License (Access Services).?
Earlier, the Department of Telecommunications (DoT) had referred the ?Terms and Conditions for Unified License (Access Services)? to TRAI and had stated that there was a need to issue fresh licenses to the successful bidders in the recently concluded spectrum auction in November, 2012. It had suggested that as an interim measure, a Service Area Level Unified License (Access Service) may be granted only to the new players.
In response to DoT?s letter, TRAI has now recommended that substantial equity or cross-holding requirement should be linked to the amount of spectrum held by the companies. The regulator has said that since spectrum is no longer linked to licence, there was no requirement for keeping cross-holding norms in the unified licence and that this condition should be included in the wireless operating licence (WOL) agreement. As per the existing cross-holding norms, a single company or person cannot have more than 10 per cent equity in more than one licensee company in the same service area.
A unified licence, as stipulated in the National Telecom Policy 2012, will allow operators to provide all telecom services under a single licence. Currently, the operators require different licences for providing different types of services like voice, internet and long distance.
The key recommendations made by TRAI are:
Reduce the maximum penalty to Rs 100 million from Rs 500 million for violating licence norms. It recommends cancellation of licence following fourth violation.
TRAI differentiates between major and minor violations and recommends separate set of penalties for each category. The minimum penalty begins from Rs 5 million for a major violation and goes up to Rs 100 million for fourth violation. The Authority is of the opinion that after the fourth major violation, the licence should be liable for cancellation. As for a minor breach of licence condition, a penalty of Rs 100,000 will be charged during the first time and will go up to Rs 2.5 million for the fourth and each subsequent violation.
The tripartite agreement between the government, company and lenders should include ?spectrum? as it can be used as collateral, and this should be included in the WOL agreement.
TRAI also recommends two separate licences – national or service area unified licence and a separate wireless operating licence – which will eliminate the need for licence amendment every time an operator gets spectrum in different bands.
To read the full text of the recommendations made by TRAI, click here
