Has the government gone back on the main reform involved in the Telecom Policy 2012 announced a year ago — delinking spectrum from license?
It would seem so, going by the latest decision by the Telecom Commission to charge the price of spectrum also when giving out telecom licenses.
It was more than a year ago that the government said that it was delinking spectrum from telecom licenses.
In other words, operators can get a license for a small amount, and then go into open bidding for spectrum and pay for it separately.
Till then, they were being charged Rs 1,658 crore for a combination of license and spectrum. Soon after, the government asked the regulatory TRAI how much it should charge for a spectrum-less license.
The TRAI, April last year, suggested a price of Rs 15 crore on an all-India basis.
TRAI noted that most of the suggestions it got wanted only a bare minimum of license fee.
“A view was that the concept of entry fee is generally applicable for new entrants, who plan to secure a particular license for the first time or those who plan to add additional services under the scope of current licenses. Therefore, it was contended that one time entry fee for new entrants in Unified License (UL) should be charged to cover the cost of administering and monitoring the Licences granted from time to time and also to deter non-serious players from taking the Unified Licence.
“Accordingly, the Authority recommends a uniform one time non refundable Entry fee of Rs. One crore for all service areas… For National level Unified Licence and District level Unified Licence, the Entry fee will be Rs. Fifteen crore and Rs. Ten lakh respectively,” TRAI said.
Now, less than a year after it made the recommendation, the government seems to have totally forgotten about TRAI’s words.
According to its latest decision, it has not removed the cost of spectrum from the cost of license. Anyone who wants new telecom licenses, such as Mukesh Ambani’s Reliance Jio Infocomm, for example, will have to pay the full spectrum-inclusive price of Rs 1,658 crore for a national level license.
The price was discovered in a spectrum-cum-license auction in 2001, and includes the price of the airwaves, in addition to the license itself.
It is not clear whether the government would give any spectrum along with Rs 1,658 crore license that it is offering to new entrants like Jio Infocomm and Tikona Wireless.