A panel of the Department of Telecommunications (DoT) examining the Telecom Regulatory Authority of India (TRAI) recommendations on a unified licensing regime is of the view that TRAI?s proposals will harm the interests of internet service providers (ISPs) and tower infrastructure companies.
Earlier in April 2012, TRAI had submitted a set of recommendations on introduction of unified licensing regime to DoT. Subsequently, DoT appointed an internal panel to examine the recommendations made by the TRAI.
According to the DoT?s panel, TRAI has laid down stringent eligibility criteria and steep entry costs for ISPs and tower infrastructure companies. The panel has stated that the TRAI has failed to take into account the objectives of National Telecom Policy 2012, which delinks spectrum from licences. It has suggested that the unified licences may be issued to operators without spectrum with the rider that the operators will be required to migrate to the new licensing regime once it is implemented.
The panel has asked TRAI for details on the entry fee to be charged from the operators and changes to their existing licence agreement. It has stated that the migration of existing licence holders to the new regime would pose problems for multiple licence holders and it will also discourage the entry of new players.
It has noted that as per the recommendations of TRAI, the entry barriers for ISPs for obtaining a unified licence will increase manyfold. And as a result smaller ISPs may not be in a position to go for unified licences and therefore drop out of the competition.
The DoT panel has suggested that the market power and spectrum holding, among other factors, must be examined circlewise for mergers of unified licences. It has also dismissed TRAI?s proposal of adopting district-level licences because this would make allocation of numbers and routing or interconnecting calls from other operators difficult. According to the panel as a district licence holder, ISPs would be unable to operate as a mobile virtual network operator that uses another?s network to offer services since that would require a service area permit.
