DoT seeks peace terms with cellcos; Russia sets up SWG to protect investment in India

15 Jun 2012

India’s Department of Telecommunications is expected to offer an olive branch to cellcos on the subcontinent. According to the Economic Times, the regulator is preparing proposals to lower the controversial reserve prices for spectrum in the upcoming auction albeit with a number of caveats; firstly, existing operators would be obliged to pay the auction-determined price for their concessions thereby renewing their licences for 20 years and also pay a one-off fee to liberalise their spectrum holdings, allowing them to utilise their frequencies to implement any technology; the DoT will allow spectrum sharing, without the imposition of further conditions or fees; the refarming of the 900MHz band will be cancelled, the DoT only auctioning such spectrum as is currently available; the government will abandon plans to charge GSM operators a one-off fee for excess spectrum held beyond 6.2MHz; and the government and operators must drop all court cases relating to policy issues and implementation against one another, for example the government’s case against the 3G roaming pacts.

The package allows the government to lower its reserve prices by collecting additional revenue from existing operators, sweetening the deal by offering to alter its plans to refarm the 800MHz and 900MHz bands to appease existing operators. The deal, which is yet to be finalised, is expected to face opposition from dual-technology operators Reliance Communications (RCOM) and Tata Teleservices (TTSL), which still have more than ten years before their existing concessions expire, less than half-way into the licence period of their authorisations.

In related news, the lower house of the Russian parliament has formed a special working group (SWG) to ‘develop necessary working mechanisms for protection of interests of the Russian companies working in India’. Parliament was motivated by the problems facing Sistema Shyam Teleservices (SSTL), in which the Russian government holds a 17.1% stake, following the cancellation of the cellco’s licences in February this year.