New telecom Policy has been announced by the government that allows the operators to access high spectrum, while paying uniform licensed fee to provide quality at affordable price.
Announcing a part of policy, Telecom Minister Kapil Sibal addressed a press conference that “the prescribed limit on assigned to a service provider will be 2×8 MHz (paired spectrum) for for all service areas other than Delhi and Mumbai where it will be 2×10 MHz (paired spectrum).” He also announced a noninterventionist merger and acquisition regime in the sector allowing up to 35 per cent market share for the merged entity while taking note of TRAI’s recommendation to consider market share up to 60 per cent and a uniform licence fee of eight per cent of Adjusted Gross Revenue (AGR) across services and circles as compared to range of 6-8 per cent now.
New Telecom Policy also tells that License to be renewed for 10yrs after expiry and there will be an entry charge for migration to the unified license that is based on the slab that for metros and A circles, it would be Rs 2 crore, while Rs 1 crore and Rs 50 lakh would be charged for B circles and C circles, respectively. Existing prescribed limit is 6.2 MHz of GSM spectrum. However, no variation has been done in the prescribed limit allotted to CDMA and it remains invariant at 2 x 5 MHz.
To sum up, the main highlights of New Telecom Policy are:
- The new policy will have global unvarying license fee across telecom sector.
- TRAI to propose migration paths for telecom companies.
- All future licenses will be unified licenses’.
- Separate telecom sectors will be allotted.
- Governmentt set rules for mergers and acquisition between telecom companies.
- In order to switch for Unified license, an entry charge has to be paid.
- License to renewed for 10yrs after expiration.
- License fee will be implemented in FY13 for 2 yrs.
- Uniform fee license upto8% of adjusted gross revenue of telecom company.