The Spectrum Tussle - Cdma V Gsm

[Honest 836]

Market forces should have determined 2G license fee: TRAI

Press Trust of India l 28 Nov l New Delhi

In the midst of a controversy over allotment of spectrum to new players, telecom regulator TRAI today said that market forces should have determined the price of a licence, which includes start-up spectrum.

"We have said a mechanism should be evolved for licence giving which must capture the market price," TRAI Chairman Nripendra Mishra said adding "because the spectrum was bundled in the licence for 2G therefore separately it was not feasible to auction 2G spectrum so that the licence had to capture the market price of the spectrum."

Asked whether DoT bypassed TRAI's recommendations for pricing the 2G licence, he said DoT had not sought regulator's views on whether spectrum was to be auctioned or not.

He, however, said that TRAI's recommendations of August, 2007 needed to be looked at as an integrated document and not as an observation separately from the recommendations.

Mishra said that section 2.73 of its recommendations of 2007 state, "In today's dynamism and unprecedented growth of telecom sector, the entry fee determined then (2001) is also not the realistic price for obtaining a licence. Perhaps it needs to be reassessed through a market mechanism."

Mishra further said "Instead of making judgement who is right or wrong ... we should be really looking at if there is scope for getting more revenue for the national exchequer... if there is, is there a way we could find out."

Telecom Minister A Raja has been saying he went on by TRAI's recommendations while giving licences and allotting spectrum, however the regulator claims it did not favour auction of 2G radio waves.

[Honest 836]

Trai rebuts Raja claim, says DoT ignored call for 2G auctioning

Economic Times l 29 Nov l New Delhi

Trai chairman Nripendra Misra has refuted telecom minister A Raja’s claim that department of telecom (DoT) went ahead with the first-come-first-serve (FCFS) basis to allot 2G licences to new players on the basis of Trai recommendations. Mr Misra said Trai had recommended auctioning of 2G licences but the telecom department chose to ignore its suggestion.

The Trai chairman said market forces should have determined the price of a licence, which includes start-up spectrum. “We had recommended a mechanism for giving licences which must capture the market price. DoT had not sought our views on whether spectrum was to be auctioned or not,” he said.

The DoT had earlier stated in reply to the central vigilance commission (CVC) that it had gone by the guidelines laid by Trai. Telecom minister A Raja has been repeatedly accused of favouring a few players to grant the 2G licences and for selectively quoting Trai recommendations to go ahead with the FCFS formula.

But Mr Misra said DoT had bypassed Trai’s initial recommendation and did not adopt the auction route. He was speaking at the roundtable conference on ‘India Telecom Landscape 2012’, organised by industry body CII.

Mr Misra also said that the process of spectrum management must capture the three cardinal features of good governance—predictability, stability and transparency. “The entire decision-making mechanism in the telecom sector should be in the public domain,” said Mr Misra.

He said Indian telecom sector has remained unaffected in the adverse global trend. “The current global financial crisis is now one of the major constraints on the pace of economic reform, but the Indian telecom sector is one of the few sectors that have remained almost unaffected,” said Mr Misra.

[Honest 836]

Ministry agrees to refund Reliance Comm Rs 112 cr

Business Line l 4 Dec l New Delhi

On company surrendering dual technology approval in six circles.

--------------------------------------------------------------------------------

In earlier instances, the Government had refused to give back the entry fee when operators had surrendered their licences.

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In an unprecedented move, the Communications and IT Ministry has agreed to refund about Rs 112 crore to Reliance Communications (RCom), which the company had paid as part of the entry fee at the time of taking the approval for offering dual technology in 2007.

The refund is on account of the company surrendering the permission for dual technology in six circles where it already has GSM services. However, in earlier instances, the Government had refused to give back the entry fee when operators had surrendered their licences. The Unified Access Service Licence terms and conditions also stipulate that the entry fee is non-refundable.

While RCom had paid Rs 1,651 crore for rolling out dual technology (both CDMA and GSMs mobile services) in 20 telecom circles (each circle is equivalent to a State), the company already has GSM-based cellular services in six circles in the eastern part of the country. RCom was asked by the Government to surrender the newly acquired dual technology approval in six circles since DoT rules do not permit a company to hold GSM spectrum under two different entities in the same circle. RCom sought a refund of the entry fee for the six circles.

Until now, DoT had refused to refund the entry fee to any operator. For example, Idea Cellular was asked to give up its new licences for Punjab and Karnataka after the Aditya Birla-owned company acquired Spice Telecom. Since Spice had mobile operations in these two circles, DoT wanted Idea to give up its licences in these areas without getting any refund. Idea Cellular had paid Rs 350 crore for acquiring the two licences prior to acquiring Spice.

Earlier in 2004, DoT had refused to give back Rs 145 crore to Bharti Airtel after the company had surrendered four fixed line telephony licences. In all these cases, DoT has been taking a stand that entry fee, once paid, is non-refundable.

Explaining the rationale for refunding the fee in the case of RCom, senior Government officials said that it could not be compared to earlier cases and a distinction has to be made between surrendering a licence and withdrawal of an approval. They said that since DoT was withdrawing the in-principle approval given to RCom for dual technology in the six circles, it would be illegal to hold the fee.

“There is no surrender of licence in this case. Reliance continues to have all the licences it already had before it was given the approval to offer dual technology. In the earlier cases, operators were asking for a refund after giving back their licences. The permission to roll out dual technology was given to RCom on top of its existing unified access licences,” said a Government official.

According to an internal note, DoT had also suggested that instead of refunding the money, it could be used to adjust any outstanding dues or future payments to be made by RCom. According to DoT’s estimates, RCom would have to pay Rs 200 crore in the third quarter of the current year as licence fees and, therefore, the excess money paid by the company could be used in that regard.

However, this has been rejected by the Communications Ministry on the grounds that since DoT was withdrawing the approval for dual technology given to RCom in the six circles, it may not be legally tenable to adjust the money against dues in other circles.

[Honest 836]

Ministry says no irregularity in refund to RCom

Business Line l 5 Dec l New Delhi

The Ministry of Communications and Information Technology on Friday said that no irregularity has been made in making refund to Reliance Communications Ltd. on surrendering its dual technology approval in six circles.

Reliance Communications was given in-principle approval in October, 2007 for usage of dual technology spectrum (GSM in addition to CDMA) in 20 service areas.

Accordingly, the company had paid Rs 1651.5 crore towards fee for dual technology permission in 20 service areas.

However, it was found that out of these 20 service areas, in six of the service areas (Bihar, Himachal Pradesh, Madhya Pradesh, Orrisa, West Bengal and Kolkata), Reliance Telecom Ltd. (RTL), a wholly-owned subsidiary of RCom, also holds UAS licences (with GSM spectrum allocated).

The reason

“The Government considered it desirable not to allocate GSM technology spectrum in these six service areas and the Department of Telecommunications amended UAS licences of RCom for 14 service areas only. The licences of RCom were not amended in spite of payment of requisite entry fees which would have otherwise enabled them to get GSM spectrum under two group companies in these six service areas, thus amounting to hoarding of spectrum. Since the Government has backed out from its commitment to grant dual technology spectrum in these service areas, it was considered appropriate to refund the fee of about Rs 112 crore paid by RCom for these six service areas,” said a press statement.

Not comparable

The Ministry added that it was incorrect to make any comparison of the present case with the case of Bharti Airtel in 2004 when they surrendered one of the two operating licenses (one for basic service and one for cellular service) held by them after migration to Unified Access Service Regime.

“The present case is also not comparable to the case of Idea and Spice who hold valid telecom access licences and on whom the merger guideline of licences in a service area will apply,” the release said.

[Honest 836]

MPs’ panel asks DoT to explain spectrum allocation

Business Line l 8 Dec l New Delhi

34 questions sent focussing on procedures followed.

The Parliamentary Standing Committee on IT has asked the Department of Telecom to explain its various decisions relating to spectrum allocation to new players, merger and acquisition guidelines and auction for 3G services.

The Parliamentary Committee has sent 34 questions to DoT primarily focussing on the procedures followed in taking the decisions.

On the issue of spectrum allocation, the committee points out that the telecom regulator had suggested that the current policy has to be reviewed since it is not an efficient way of using a scarce resource like spectrum. DoT has been asked to explain whether it had followed the suggestion of the TRAI and if not, any reason has been given by the DoT for not adhering to the recommendations.

CVC probe

Pointing to the investigation being carried by the Central Vigilance Commission on the decision to allocate spectrum on a ‘first come-first served’ basis, the Committee said that while DoT has said the policy was based on the recommendations of the TRAI, the regulator has denied it.

“Please reconcile and cite specific recommendations of TRAI by which DoT was guided while allocating spectrum in the manner it has been done,” the Committee said. The Committee has also asked DoT whether excess spectrum had been given to existing cellular players and why the Government had not taken it back.

M&A guidelines

On the M&A guidelines, the Committee said while the TRAI has suggested that any proposal of merger and acquisition should not be entertained till the roll out obligation is met, the DoT deleted the word ‘acquisition’ from the final policy.

“What were the reasons/factors necessitating deletion of the word acquisition? And to what extent do the department justify the deletion in the context of present developments?” the Committee has asked DoT.

3G auctions

On the reserve price for 3G auctions, the Committee has asked the DoT to explain why it has fixed an amount that was decided two years ago. “As these recommendations were made more than 2 years back and in the meantime the mobile telephone business has seen a quantum jump in operations and profitability, does not that department think that the reserve price recommended by TRAI are not in consonance with the prevailing scenario?” the Parliamentary body posed.

[Honest 836]

Govt defends spectrum policy in HC

Business Line l 10 Dec l New Delhi

The Government on Wednesday told the Delhi High Court that the allegation of a scam in spectrum allocation to new players was baseless. It said that the allegations were being made at the behest of some existing telecom companies who do not want entrants in the sector.

The Government was responding to a petition challenging its policy of allocating spectrum on the first come first served basis.

“It seems that the petitioner is acting (at) the behest of parties who shall have competition from the new entrants in the market. This is with an ulterior motive of stalling competition. The allegation that there is a scam of several thousand crores is totally false and has been made only to embarrass the Government of India,” the government said in its 48-page affidavit filed at the Delhi High Court.

[Honest 836]

Raja comes under AIADMK fire in Rajya Sabha

TelecomTiger l 16 Dec l New Delhi

The controversy surrounding the 2G policy decisions made by DoT and A Raja in particular simply refuse to die down. Keeping its ante against the minister, today opposition party AIADMK, which also is fierce rival of DMK, A Raja’s political party in TN, demanded the resignation of the minister terming the whole controversy as a scam.

AIADMK demanded a joint Parliamentary Committee probe into the issue.

The issue came to light as AIADMK leader, V Maitreyan raised it during zero hour labeling it as greatest ever scam in recent times and was quickly supported by members from the BJP and the CPM. The leader surpassed all estimations of loses as he said that the loss amounted to Rs 100,000 crore.

He said that the allocation was done to mysterious companies and to those companies without any experience in telecom like Unitech.

The AIADMK demanded cancellation of the licences.

DMK members Kanimozhi and her party colleagues as also some Congress members came out in support of the Minister.

[Honest 836]

DoT seeks Cabinet nod on spectrum usage charges

Business Line l 23 Dec l New Delhi

The Department of Telecom has sought the Cabinet Committee on Economic Affair’s approval on three decisions taken last week related to spectrum usage charges.

The Telecom Commission, on December 19, had decided to increase spectrum usage charges for the existing 2G players.

It had also decided to scrap the proposals to impose a one per cent spectrum usage charge and an additional two per cent administrative fee on 3G players. All the three issues have been referred for ratification by the CCEA.

Though these issues are well within the domain of the DoT, it has been decided to take the Cabinet into confidence to avoid any controversies.

The DoT’s earlier decisions on 2G spectrum allocation has run into rough weather with the telecom regulator, the Parliamentary Standing Committee on IT and the Central Vigilance Commissioner raising questions on the process. According to the Cabinet note prepared by the DoT, it has also referred the issue of limiting the proposed 3G auction to 5 blocks in each circle.

“The Minister of Communication and IT has approved the recommendations of the full Telecom Commission and desired that this matter be put up to the CCEA as TRAI has changed its earlier recommendations, which was accepted by the Government,” said the note.

[kesav 127]

The responses have been received from stakeholders on future spectrum policy.

Click "Responses received for the Consultation Paper on Overall Spectrum Management and review of license terms and conditions dated 16th October 2009" in the below link

http://www.trai.gov.in/ConsultationPapers_list_year.asp

The following should be the key points which TRAI should keep in mind while formulating the final policy.

1) Technology Neutrality.

same amount of spectrum should be at same price irrespective of technology

same amount spectrum should be given at each incremental step irrespective of technology

2) Level playing field

ground rules should not favour one section of players(like incumbents vs new players)

3) Fostering efficient use of spectrum

4) Provision to get back hoarded spectrum

5) Allowing spectrum trading

6) Increasing competition by supporting new players to settle in smoothly

Edited November 14, 2009 by kesav

[kesav 127]

For the first time ever TRAI is conducting a 3-day Open House Discussion (OHD) on spectrum policy.

Normally OHD of TRAI happens on a single day.

This long scheduled duration clearly says intention and priority TRAI attaches to this issue.

http://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/709/pr20nov09no77.pdf

:clap:

This OHD is very critical precursor for 3G auction.

The outcome will make or break the expected revenue coming out of 3G auction.

Hope things will be settled once for all.

OHD is scheduled for 30th Nov, 1st & 2nd Dec.

For the successful conduct of OHD the following things has to be considered by TRAI

1) Don't ever discuss on the points where Govt.(TRAI) alone can make final decision

2) Bring only the points where Govt.(TRAI) needs clarity and advice from stakeholders

3) Discuss point by point.

4) Don't make any hasty decision for the purpose of revenue generation within this fiscal

5) Don't make decision within OHD. OHD is only for discussion.

6) Always make decisions(after OHD by meticulously going through views expressed by stakeholders) with long term objective of offerdibility of this essential service to the rural poor

7) Ensure the decisions made are sustainable under the lense of Law for minimum of next 5 yrs

8) Don't make decisions favouring Technology or Section of players(like Incumbents)or Finance Ministry (revenue generation)

9) Find optimum point where revenue to the exchequer and the offerdability of service to consumer is at optimum best

Edited November 24, 2009 by kesav

[kesav 127]

HC rejects govt plea on advancing date for spectrum

The Delhi High Court today rejected a petition by the government challenging an earlier order quashing a notification for advancing the cut off date for release of 2G spectrum to telecom operators.

The Telecom Ministry, headed by A Raja, had advanced the date by a week to September 25, 2007 for issuance of licence, a decision that was challenged by Chennai based operator S Tel.

After losing the case at the single member Bench, the government had moved a Division Bench seeking quashing of the order, which in other words would mean that Telecom Ministry would have to consider applications received till September 31 received for 2G spectrum.

A Division Bench comprising Chief Justice A P Shah and Justice S Muralidhar dismissed DoT's petition seeking stay over the order of the single member Bench of July 1, 2009.

The court did not agree with DoT's submission that it had advanced the date to handle the large number of applicants and it was a 'public policy' decision.

The Division Bench upheld Justice G S Sistani order, who held that DoT could not "arbitrarily fix a cut off date for capping the number for licences bundled startup spectrum" and quashed the press note issued on October 10, 2008.

"The respondent (DoT) has failed to satisfy the court as to how any public interest would be affected in the matter. The impugned press release dated October 10, 2008 is quashed," Justice Sistani said directing DoT to consider Chennai-based S Tel's application to start operations in 16 circles.

Earlier, the deadline was October 1, 2007. However, in January 2008, the DoT had amended the criteria and said that due to a large number of applications, only requests up to September 25, 2007, would be considered.

The court's direction had come on a petition filed by Chennai-based S Tel, whose application for licence in 16 circles was turned down as it had applied on September 28, 2007, three days after the cut-off date.

Very important judgement at very important time.

What will Govt. do now?

There are 2 options

Option 1: Accept all the applications filed till October 1,2007 and allocate start-up spectrum

Option 2: Prolong the legal battle in Supreme Court.

I feel even SC will not find any meaningful reason from Govt. on why Govt. advanced the cut-off date from Oct 1st 2007 to Sep 25 2007 through press release on Jan 10 2008.

Choosing option 2 will only delay already delayed spectrum policy and I find no proper reasons through which Govt. can convince SC in this case.

Edited November 25, 2009 by kesav

[csmart 472]

this judgment is good. it implies that it was scandalous on the part of A raja for changing the sumbission date. now all depends on SC. you cant predict SC. SC has many times given orders that were not rational.

[kesav 127]

Clear air on 2G policies before inviting 3G apps: COAI

GSM operators have asked the government to take a final decision on 2G policies and review conditions for licence before inviting applications for 3G.

In a letter to Telecom Secretary P J Thomas, COAI, the GSM operators' association said "issues raised by Trai in its consultation Paper on Overall Spectrum Management and Review of Licence Terms would have an enormous bearing on the auction process and the revenues that would be raised by the government."

The Department of Telecom (DoT) will invite applications for 3G auctions on December 8.

COAI said it would be unfair of the government to expect bidders to go into the auction process blindly knowing that fundamental changes in the spectrum allocation and pricing policy and other policy and regulatory issues are on the anvil.

Trai is midway through its consultation process and it is expected to soon submit its recommendations to the DoT

A very good move by COAI.

Certainly spectrum and licensing policy which TRAI is finalizing cast a big shadow over 3G auction.

The recent HC judgenent mentioned above also adds some fodder to the already growing discussion.

source :: http://www.business-standard.com/india/news/clear-air2g-policies-before-inviting-3g-apps-coai/79209/on

[kesav 127]

Raja misled high court.

Concealed PM’s letter asking him to stop allocation procedure.

Telecom Minister A Raja had withheld from the Delhi High Court a directive by Prime Minister Manmohan Singh asking him to keep in abeyance the entire procedure of 2G spectrum allocations. A High Court Bench, headed by the Chief Justice, recently rejected an appeal by the Department of Telecom against a single-judge order quashing the reversal of cut-off date.

In his submission before the court, the DoT said that Raja informed the Prime Minister on November 2, 2007 on reversing the cut-off date. The implication was that Raja had PM’s concurrence for changing the last date for submitting application for spectrum licence.

However, in his affidavit, which is part of the court’s recent judgement, Raja concealed the fact that on the same day the Prime Minister had directed him to stop the entire process of spectrum allocation. The Telecom Ministry only produced before the court Raja’s letter to the Prime Minister on his decision to reverse the last date of application (cut-off date). The PM’s letter was not attached in the affidavit vetted by the Law Ministry and Attorney General G Vahanvati.

On July 1, 2009, Justice GS Sistani of Delhi High Court quashed the DoT’s decision directing the reversal of cut-off date in a petition filed by a telecom operator STel.

On November 24, Chief Justice Ajit Prakash Shah and Justice S Muralidhar rejected the appeal filed by the DoT and upheld the single-bench’s verdict. This verdict has opened a flood gates of troubles for the Government, as they have to allot spectrum to all those who applied till October 1, 2007.

Rejecting all the versions of the Government, even on Raja’s claim that he got concurrence from Prime Minister for reversing the cut-off date, the Delhi High Court concluded in the detailed 10-page judgement: “There cannot but be a change in the rule after the game has begun.”

According to sources, Raja’s letter (produced in the court) was delivered at the Prime Minister’s residence at 7 pm on November 2, 2007. In the letter, Raja slammed Law Minister (HR Bhardwaj) for suggesting the creation of Empowered Group of Ministers for Spectrum allocation and sought the Prime Minister’s consent for reversing the cut-off date and allotment on first-come-first-served basis.

“The Ministry of Law and Justice, instead of examining the legal tenability of these alternative procedures, suggested referring the matter to EGoM. Since generally new major policy decisions of a department or inter-departmental issues are referred to the GoM, and needless to say that the present issues relate to procedures, the suggestion of the Law Ministry is totally out of context,” Raja said.

Within hours, the Prime Minister shot back a letter to Raja directing him to adopt a transparent auction procedure, freeze the entire process, and seek his clearance for further actions.

“I would request you to give urgent consideration to the issues being raised with a view to ensuring fairness and transparency and let me know of the position before you take any further action in this regard,” the Prime Minister said. In the two-page letter, Manmohan Singh also objected to Raja’s proposal to go ahead with the first-come-first-served model, cheap pricing and reversal of cut-off date.

Raja had issued a Press release on September 24, 2007, fixing the cut-off date of application for October 1, 2007 for telecom licences and spectrum. But on January 10, 2008, his Ministry issued another Press release announcing the reversal of cut-off date to September 25, 2007. Moreover, the release, which was made public at 2:45 pm, asked the telecom companies to pay the fee (around Rs 1,600 crore) in demand draft between 3:30 pm and 4:30pm. Sanchar Bhawan, the headquarters of DoT witnessed a mad rush and some telecom operators were manhandled by the bouncers brought by rival companies. It is still a mystery, how the nine companies submitted the huge fees through demand draft within 45 minutes.

source :: http://www.dailypioneer.com/220340/Raja-misled-high-court.html

It's interesting to note that Raja went ahead although PM has advised him in contrary.

Now TRAI is formulating the new licensing conditions and spectrum policy.

Even if TRAI comes out with auction as a new spectrum policy, it cannot be applied for applicants who have applied till October 1, 2007.

I don't think India will have 2G spectrum(even after including spectrum to be vocated by Defence) available for auctioning after distributing spectrum to all the applicants till October 1, 2007.

Only way out is to provide all the start-up spectrum bundled with license and incremental spectrum by way of auctioning.

Let the market do the rest by M&A.

In the M&A guidelines, TRAI can force the old company which is acquiring the new entrant (less than 2 yrs from the date of start-up spectrum allocation) to provide amount equal to 4.4 MHz (pro-rated from the market value of final 3G auction price) to Govt.

Edited December 5, 2009 by kesav

[kesav 127]

Delhi HC dismisses petition on 2G spectrum allocation.

The Delhi High Court has dismissed a petition challenging the first-come, first-serve policy followed by the government while allotting new telecom licences bundled with 2G start up spectrum.

A division bench headed by the Chief Justice A P Shah dismissed the PIL filed by one Arvind Gupta, alleging that the Department of Telecom alloted spectrum much below the market prices to the new operators.

The division bench observed that it has already given its verdict in a similar matter and said "there is no point of law in your petition".

The court was referring to a similar matter last week, when it had quashed a DoT's notification advancing the cut-off date for release of 2G spectrum to telecom operators by saying that it cannot change the rules after the "game" has begun.

Another judgement from HC which TRAI must keep in mind while formulating the new licensing and spectrum policy.

[kesav 127]

SC uphelds Delhi HC’s order over DoT’s move to advance cut-off date for new 2G licences

In a move which may put the Department of Telecom (DoT) in a tight spot, the Supreme Court (SC) today upheld the earlier decision of the Delhi High Court which ruled against the DoT’s decision to advance cut-off dates for new 2G licences in 2007.

The SC today stated that even if S Tel had written a letter to DoT. It has got nothing to do with court proceedings. It said that it uphelds the decision of the Delhi HC. The SC however objected to such a letter being written considering that the matter was sub-judice.

The development results in second time that a higher court has ruled against DoT’s decision of 2007.

S Tel which had lost on new 2G licences in 16 circles due to DoT’s decision had challenged the decision in Delhi HC.

In November last year, the Delhi HC had upheld a decision passed out by its single Bench which quashed DoT’s move to advance the cut-off date for application of new licences in 2007.

“The appellant (DoT) has been unable to show that its decision to revise the cut-off date after receiving the application of the respondent (STel) was based on some rational criteria. It is vulnerable to being labeled arbitrary and irrational,” the Delhi HC had said in November.

Incidentally just last week the DoT had issued a notification to S Tel to immediately stop its services over some security concerns which later turned out to be those related to interception measures employed by the operator. Following this S Tel executives met Union Communications Minister A Raja and then it emerged that the firm had written a letter to DoT saying that it may review the issue of pending licences in 16 circles and actually may not apply for these licences.

This move was widely perceived as a compromising formula between the operator and the DoT.

With SC’s ruling, the Communications Ministry may have to face some rough weather in the days to come.

A fantastic judgement from SC

:clap:

I'm deeply worried about the things which happened in the last few days.

DoT send directive to STel to top its services in 3 circles for some rudimentary reasons.

The purpose was very clear. DoT wants to arm-twist STel so that they'll not fight the case in supreme court.

STel budged under the pressure and its CEO met Mr. Raja and informed him that they'll withdraw the case in SC.

SC took strong objection to this back-door diplomacy when matter is subjudice and asked STel to tender apology.

SC has now ruled against DoT and hence DoT's arm-twisting strategy failed miserably.

I hope opposition will take a note of this goonda behaviour fom DoT and take communication ministry to task in the ongoing budget session.

SC ruling upholds the sanctity of the Judciary and it shows that Judiciary can deliver un-biased judgement even when the prosecution tries to withdraw the case due to back-door pressure from defense.

[KanagaDeepan 1,084]

Nothing good will happen to Indian Telecom till R@ja was thrown away from his seat... But it is very very unlikely to happen..

[kesav 127]

Govt makes U-turn and withdraws missive against S Tel

NEW DELHI: The Centre has withdrawn its earlier directive to S Tel, where the telco was asked to stop its mobile services on security grounds, an

executive with direct knowledge of the development said. The directive was withdrawn last week. The department of telecom (DoT) has given no explanation for the withdrawal. S Tel executives declined to comment, but sources linked to the company confirmed that the directive was withdrawn.

Last month, the DoT had issued a terse one-line communiqué to S Tel, a joint venture between Chennai-based Siva Group and Bahrain Telecom (Batelco ), directing it to immediately stop its mobile services in the circles of Himachal Pradesh, Bihar and Orissa, citing national security concerns. The telco currently offers services in these three circles and is in the process of launching mobilephone operations in three more circles.

The DoT directive had came days before S Tel’s case against the DoT was to came up in the Supreme Court. S Tel had accused the telecom ministry of bias while allotting mobile phone licences in early 2008, which was upheld by Delhi High Court. DoT’s alleged armtwisting tactic worked as S Tel did not pursue the case in the Supreme Court.

The incident began in January 2008, when the communications minister A Raja had arbitrarily announced that the first-come , first-served basis for allocating telecom licences—which come bundled with 2G spectrum—will only apply to companies that applied before September 25, 2007. This was despite Mr Raja and the DoT announcing earlier that the cut-off date for filing applications was October 1, 2007. A total of 46 companies had submitted applications for licences before the October 1 deadline announced by DoT.

The U-turn ensured that big names such as AT&T , Sterlite, DLF, Ispat and Moser Baer— all of which applied after September 25 but before October 1, 2007 —were denied telecom licences. This also resulted in S Tel getting licenses for only six of the 22 circles, which led to telco approaching the Delhi High Court.

Last year, the Delhi High Court ruled in S Tel’s favour, in what turned out to be a major embarrassment for the ministry , which later approached the SC for relief. The Delhi High Court ruling opened a Pandora’s box for the government . It implied that a total of 24 companies , which among them had filed about 200 applications and were denied licences on the basis of this cut-off date, would now have to be given 2G licences by the communications ministry.

The Supreme Court bench slammed S Tel for offering to withdraw its case. The apex court also did not nullify the Delhi High Court ruling, which said that DoT’s decision to advance the last date for new telecom licences was illegal.

source :: http://economictimes.indiatimes.com/news/news-by-industry/telecom/Govt-withdraws-missive-against-S-Tel/articleshow/5847234.cms

[kesav 127]

Tata Tele approaches Raja, seeks end to discrimination against co

NEW DELHI: Tata Teleservices has approached communications minister A Raja seeking a level-playing field and ending the discrimination against the

company on the policy front. The telco has pointed out that it has been given a raw deal for many years and has listed out 11 policy-related issues where it has been discriminated against as compared to its competitors.

The Tatas run India’s fifth-largest telecom operator after Bharti Airtel, Reliance Communications, Vodafone Essar and BSNL. It has a market share of 12% with over 67 million customers as of March-end as per the latest data released by sector regulator Trai.

The telco’s MD Anil Sardana, in a communication dated May 6, has told Mr Raja that the company has not been allotted GSM airwaves in Delhi and nine other circles despite a two-year wait, while many other new entrants, including the other dual licence holder (Reliance Communications), have all received airwaves. It has also told Mr Raja that there were talk in official circles about awarding additional airwaves to new entrants, which would take their holdings of this scarce resource to 6.2 Mhz, or units per circle, from 4.4 MHz that they hold currently.

Mr Sardana has said that awarding additional airwaves to new entrants, even as the Tatas were waiting for minimum requisite start-up frequencies of 4.4 MHz, “would be highly discriminatory and would put at risk the huge investments made by the company, while also resulting in huge advantages to other operators who would end up holding almost twice as much airwaves as Tata Teleservices”.

The Tatas have said that while they support auction methodology for all future allocation of 2G airwaves, the process must be adopted only after incumbents are made to return or pay market rates for all the additional airwaves they hold beyond the licence limits. The telco has also provided detailed information to DoT to prove that it had more GSM customers than some of the incumbent operators in several regions of the country, despite holding bare minimum or start-up 2G airwaves for GSM in these places. Mr Sardana has sought that the telecom department (DoT) specify a level-playing field to help new entrants against incumbents who it claimed are hoarding airwaves.

The company has categorically pointed out that it is not seeking preferential treatment, but added that it has been the torchbearer to many telecom reforms despite the fact that these changes have often come at the cost of the company.

For instance, it has said that Tata Group chairman Ratan Tata had called for 3G airwaves to be priced as early as 2005 even as other operators, and even the regulator, had recommended that these frequencies — which enable telcos to offer faster data services — be given for free. The communication also highlighted that India’s leading operator (Bharti Airtel), which had responded to Mr Tata’s proposal of pricing 3G airwaves by stating that the group should donate to the Prime Minister’s Relief Fund if they had excess money, had now made a turnaround and are lauding the auctioning of 3G spectrum.

Further, Mr Sardana also pointed out that there was ‘no parity’ between the two dual technology licence holders — Reliance Communications and Tata Teleservices — both of whom offer services on CDMA and GSM platforms.

The Tata Teleservices MD said that RCOM had put in its GSM application two years before the government unveiled its dual licence policy, while also adding that the Anil Ambani-promoted company had been given its ‘dual licence’ a day before the policy was officially unveiled. On the other hand, the Tatas, which was the first to submit the application for dual licence after the policy was formally announced “was placed in the lowest spot in the queue for spectrum quite arbitrarily, putting to wind all prevailing norms”, his communication said.

“Interestingly, even the dual technology consent for Tata Teleservices for the three circles — Assam, North East and J&K — have been held up for no good explainable reasons and we have to wait for someone to level the playing field for us,” Mr Sardana added.

The Tatas have also pointed out that the government has not done any work to prepare a road map for the future of CDMA operations of telecom companies. It has also added that existing norms all favoured GSM-based operators, as they (GSM telcos) were entitled to hold double the amount of airwaves when compared to their CDMA counterparts.

“On account of the disparity between CDMA and GSM, it is only fair that the spectrum charges payable to the government by CDMA operators should be half of the spectrum charges payable by GSM operators, more so at start-up spectrum level,” Mr Sardana added.

The company also reiterated that incumbent GSM operators were awarded 2G spectrum in 900 MHz frequency band, while later entrants like Tata Teleservices were awarded frequencies in the 1800 MHz band. Mr Sardana said that while the 900 MHz while highly efficient, the 1800 MHz required multiple times more capital and operating expenditure, and therefore, ‘recipients of the latter must get some kind of compensation or subsidy for this disadvantage.

source :: http://economictimes.indiatimes.com/news/news-by-industry/telecom/Tata-Tele-approaches-Raja-seeks-end-to-discrimination-against-co/articleshow/5915151.cms

Absolute and Remarkable.....

Each and every point raised by Mr. Sardana is valid and meaningful.

Hope TRAI and DoT listening......

[KanagaDeepan 1,084]

All points are valid... but Sardana, should NOT have talked with mouth... All R@JA needs is money, money and nothing else... He loves to be beaten with money...

OH God, so many millions of thunders are appearing in the sky, every minute... Why NOT even one is falling on R@ja's head

Edited May 11, 2010 by KanagaDeepan

[kesav 127]

TRAI has released the most exhaustive hitherto known 2G policy.

It was remarkable job by the part of TRAI not to burden the new players and that same time forcing the incumbent players to be more spectrum efficient.

Excess spectrum alone is priced heavily at 3G rate and not touching the start-up spectrum is a very clever move.

There's clear policy to get the back the spectrum in excess of 10 MHz which is a welcome move.

Very intersting policy is in the area of refarming spectrum in 900/800 MHz range. we've to see how DoT and TRAI will accomblish this task.

M&A guidelines are clearly laid out and it has proper steps to contain monopoly.

:clap: :clap:

:praise:

Hope atleast this time DoT will implement the policy in totality and not in bits and pieces.

http://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/735/pressrelease.pdf

http://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/735/FINALRECOMENDATIONS.pdf

RCom says TRAI recommendations progressive

Reliance Communications (RCom) welcomed regulator TRAI’s recommendations terming them as ‘consumer-centric’.

"TRAI recommendations would lead to spectrum efficiency and rural penetration. Government would be able to release additional spectrum," said RCom, wireless business CEO, Syed Safawi.

RCom will have to pay about Rs.22 crore for excess spectrum held in Bihar.

source :: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?storyid=9122&section=S174

Incumbents will have to incur a big financial hit due to TRAI’s new recommendations

The already dwindling growth rate of incumbents including Airtel, Vodafone and Idea is set to become more severe with the regulator’s new recommendations on 2G spectrum allocation and pricing.

Incumbents hold spectrum beyond 6.2 MHz in significant circles. They will now have to match prices equal to the successful bid price for 3G spectrum auctions. This could be financially pinching for operators as 3G price in some of the metro circles and category ‘A’ circles are very premium priced.

TRAI’s recommendations state that operators who hold additional spectrum will now have to match 3G spectrum price for spectrum held beyond 6.2 MHz and within 8 MHz. For spectrum held beyond 8 MHz, service providers will have to pay 1.3 times the price of 3G spectrum.

Bharti and Vodafone particularly hold additional spectrum beyond 10 MHz in many circles.

At the current trends, Bharti, Vodafone and Idea will collectively have to shell out Rs.10,000 crore towards payment for additional spectrum.

Additionally TRAI has also propsed to do away with the lock-in period presently imposed on new operators. It has proposed that market share of the merged entity should not be more than 30% of the total subscriber base. This means incumbent Bharti Airtel can not acquire any new entrant since its market share is already more than 30%.

Moreover post merger, the entity will have to pay a spectrum transfer price which will be 5% of the difference between the transaction price and the total current price.

source :: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?passfrom=breakingnews&storyid=9123&section=S174

TRAI for uniform licence fee of 6% by 2014

TRAI has proposed introducing a uniform rate of 6% as annual licence fee component of total adjusted gross revenues from 2014.

Presently operators pay in the range of 6 % to 10% as licence fees.

“This licence fee should be brought down progressively from the existing rates to an uniform rate of 6 per cent by the year 2013-14, said TRAI chairman J S Sarma.

COAI was quick to welcome the move as Rajan Mathew, DG COAI said his has been a long-standing demand of the operators, who said the total levies of the telecom sector in India were the highest in the world, at 30 %. He added that the move will bring down costs of the operators.

source :: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?storyid=9124&section=S174

[kesav 127]

TRAIs 2G recommendations shocking: Bharti

The countrys largest wireless operator by subscribers Bharti Airtel has come out strongly against the recommendations of Telecom Regulatory Authority of India (TRAI) for 2G pricing, saying that the suggestions are shocking, arbitrary, and retrograde.

In far reaching recommendations, which can reshape the telecom sector, telecom regulator, TRAI on Wednesday recommended pricing of 2G spectrum along the lines of faster 3G services and tweaked the merger norms between firms. Bharti said TRAIs recommendations overturn all existing policies for the last 15 years and are against global norms. The recommendations are designed to punish efficient and performing companies, it said, and tailor made to favour select operators.

Telecom biggies like Bharti Airtel or global major Vodafone may soon have to fork out huge sums of money for the spectrum they are using. The telecom regulator has recommended pegging the price of existing spectrum to 3G spectrum prices. According to its formula, spectrum beyond 6.2 MHz in GSM and 5 MHz in CDMA will be priced. Spectrum in the 1800 MHz band will cost the same as 3G, while spectrum in the 900 MHz band will cost 1.5 times the price of 3G. There will be a cap of 8 MHz of spectrum per operator. In Delhi and Mumbai the cap will be 10 MHz.

Also, the existing operators will need to pay onetime fee. For spectrum between 6.2 to 8 MHz the fee will be equal to 3G prices and for spectrum above 8 MHz the price will be 1.3 times the price of 3G. Clearly operators are not happy, as they feel that high prices of 2G and 3G spectrum could impact tariffs and their balance sheets.

The telecom regulator also recommended moving away from the subscriber linked criteria. Operators now will get spectrum depending on their coverage and efficiency and in fact TRAI recommended delinking spectrum from license. Meanwhile, to give a leg up to consolidation in the sector, the telecom regulator feels that the three-year lock-in period for merger of telcos should be done away with provided the merged entitys market share is below 30 per cent and the promoter continues to hold 51 per cent stake in the company.

source :: http://beta.profit.ndtv.com/news/show/trais-2g-recommendations-shocking-bharti-41915

Minimum expected reaction from big thug Bharti.

From the day I started observing the telecom sector, I've never seen a day when Bharti appreciating any pro-consumer move taken by TRAI and DoT.

It's just disgusting.

Let them challenge these recommendations in court if they've any guts.

Very much sure that this time too they'll be slapped by Supreme Court.

I agree to the point that excess spectrum pricing being equated to 3G is very harsh.

Even TRAI has said that it'll start the consultation for fixing the fee. 3G equivalent price is just a temporary recommendation.

But the principle of charging 1.5 times for 900 MHz and charging above 6.2 MHz are well thought out move.

Placing the new operators who are looking for contracted spectrum in front of the queue against the operators who are looking for excess spectrum is a pro-competitive move.

I can say for sure that whoever released the information for press from Bharti could have not read the complete recommendation in totality.

Pulling back the 900 MHz spectrum is another gem in the recommendations since the current method of new operators in 1800 Mhz against old incumbents in 900MHz alone puts new operators in terrible disadvantage of higher Capex and Opex cost.

So for only few operators have commented on recommendations of which RCOM has appreciated, Bharti has disapproved and TATA has mixed reaction.

Im sure majority of the operators will be very happy about the recommendations except for Bharti & Vodafone and may be Idea.

Edited May 12, 2010 by kesav

[kesav 127]

TTSL says TRAI recommendations do not ensure level playing field

Tata Teleservices Ltd. (TTSL) said that the telecom regulator, TRAI’s new recommendations related to allocation and pricing of 2G spectrum did not address the ‘inequalities’ in spectrum allocation and issues of excess spectrum beyond 6.2 MHz.

TRAI’s latest recommendations have further pushed the company in the queue to acquire spectrum in key cities including Delhi. The recommendations state that spectrum needs to be allotted to those who have start-up spectrum or up to 6.2 MHz spectrum. Only later on, spectrum will be allotted to those who are in queue.

‘The recommendations thus impacts TTSL adversely and makes our case of expecting minimum spectrum the worst in the industry,” said a TTSL spokesperson. “We urge the government to examine these gaps once again and ensure that the inequalities are arrested and not perpetuated further. We would emphasize on the need to create a truly level playing field in the Indian telecom industry.”

TATA has problem since they're not yet alloted GSM startup spectrum in many circles.

Source :: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?storyid=9118&section=S174

[kesav 127]

Vodafone Essar: TRAI recommendations simply unworkable

Vodafone Essar expressed strong disappointment over TRAIs new policy guidelines pertaining to allocation and pricing of 2G spectrum.

As a major player in the India communications market, having invested heavily to drive the industry and Indian economic development, Vodafone Essar (VEL) is extremely disappointed with the TRAI Recommendations on spectrum, licensing and M&A. We believe that they are retrograde for the industry and against the interest of consumers, said the company.

It stated that the recommendations deviated fundamentally from the holistic, forward looking spectrum reform framework recommended by the Expert Committee set up by DoT that TRAI was tasked with considering.

While the DoT Expert Committee recommended a forward looking and coherent set of proposals, the TRAI recommendations have cherry-picked dozens of incompatible elements and resulted in a set of proposals which are opaque, illogical and discriminatory, added the company.

Most seriously, the recommendations would punish the companies that have invested early and taken the initiative to extend telecom services to all sections of the society. By seeking to put tremendous additional financial burden on the pioneer companies, in the form of arbitrary one-time charge on a portion of the old 2G spectrum but linked to ongoing 3G spectrum prices, the recommendations would place a critical industry in jeopardy, and seriously undermine the goal of extending telecom and internet services to the poorest across the country. The TRAI Recommendations are simply unworkable, said Vodafone Essar.

source :: http://www.telecomtiger.com/PolicyNRegulation_fullstory.aspx?passfrom=PolicyNRegulation&storyid=9130&section=S174

As expected Vodafone started shedding crocodile tears.

They are always willing to make cartel with Airtel and Idea to loot customers but when it comes to paying to the India's exechequer they'll start making irritating sounds.

Edited May 13, 2010 by kesav

[kesav 127]

TRAI hits back at telcos, says read the fineprint

The Telecom Regulatory Authority of India (TRAI) suggestions earlier this week has drawn a lot of flak from companies like Bharti Airtel, Vodafone and Tata Teleservices. For the past two days, telecom stocks took a beating on these recommendations.

The only telecom company which welcomed the move was Reliance Communications which is the least impacted by these recommendations.

Today, the regulator hit back at the criticism. Sources in the Telecom Regulatory Authority of India (TRAI) told CNBC-TV18’s Siddharth Zarabi that stakeholders and investors must read fineprint of its report. "There is no need for knee-jerk reaction and cherry-picking the TRAI report. Companies must talk specifics rather than respond in general terms."

On M&As:

Defending its M&A recommendations, TRAI sources said the criticism of its M&A pricing betrays lack of understanding by telcos. "The M&A recommendations are a big boost for Big Telecom as it allows unfettered mergers. Big Telecom can acquire smaller companies, while smaller firms will benefit from spectrum sharing. TRAI feels the path for growth is through the M&A route while consolidation is the logical course over the next few years," they added.

TRAI sources said the merged entity cannot get two 6.2 Mhz blocks at the old price of Rs 1,650 crore. "The merged entity has to pay for one block at the current price."

Impact on companies:

The total impact of a one-time spectrum fee on telecom companies is Rs 14,237 crore . Around 40% (Rs 5,707 crore) of this amount is from state-run telecom operators. The impact on BSNL and MTNL is Rs 3,038 crore and Rs 2,669 crore, respectively.

There will, however, be a big difference between gross impact and net outflow, sources said. The gross impact on Bharti Airtel is Rs 3,180 crore while the net impact stands at Rs 1,184 crore over four years.

Vodafone Essar will see a gross impact of Rs 2,849 crore and a net hit of Rs 1,462 crore, spread over 4-5 years. Its net impact is lower on the proposed uniform licence fee. TRAI has proposed a cut in licence fees to 6% by FY14. Currently, licence fee is charged at 10%-8%-6% circle-wise.

The gross impact on Idea, Loop Mumbai (BPL), Aircel and Reliance Communications stands at Rs 1,066 crore, Rs 949 crore, Rs 468 crore, and Rs 18 crore, respectively.

Sources said there is a conscious decision not to levy spectrum fee retrospectively. The impact of a retrospective levy would be over Rs 6,000 crore.

The 900 Mhz band refarming is only at licence renewal time. This decision is a big benefit to Bharti Airtel and Vodafone Essar

The regulator, sources said, feels it is unfair to first seek 2G auction and now suddenly change its stance.

source :: http://www.moneycontrol.com/news/cnbc-tv18-comments/trai-hits-back-at-telcos-says-readfineprint_457604.html

A fantastic and fitting reply from TRAI.

:clap: :clap:

It's ridiculous on the part of Bharti to shed tears for spending just Rs 1,184 crore.

They've been looting customers year after year without any pro-consumer move.

They've known only for milking customers by forming cartel with Vodafone and Idea.

Hope they realize that the current level of teleom tariff is only due to competitive operators like TATA and Reliance.

As expected only Airtel, Vodafone and TATA have responded in negative to the recommendations.

Even Idea, Airtel's cartel partner have not responded against.

This in itself clearly says that recommendations are pro-consumer and pro-competitive.

Even TATA's objection to the recommendations are only related to the missing chapters on dual-tech operators and certianly not on the points Airtel and Vodafone are barging about.

Hope DoT will do proper homework and appreciate the spirit behind the recommendations and implement all the recommendations in totality.

DoT, it's time for you to act swift and decisive.