Dot, Trai Headed For Fight Over Licence Cap

[savramesh 37]

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NEW DELHI: The Department of Telecom (DoT) and sector regulator TRAI are now headed for a new row over capping the number of telecom licences in a circle.

Following the DoT’s move to ask TRAI to reconsider its earlier recommendations, where it had said that there should not be a cap on the number of telcos that are allowed to offer telecom services in a circle, the regulator had replied that it could not look at the issue in isolation.

TRAI had also pointed out that in view of the ‘criticality and complexity of the issues involved, the entire subject required detailed and in-depth analysis’, while adding that it would issue its recommendations by November-end.

The communications ministry has now said it cannot wait until November-end for TRAI’s recommendations. It has also pointed that the as per the TRAI Act, the regulator is required to respond to the DoT within 60-days and must therefore submit its recommendations latest by September 5, 2009.

The DoT’s move to ask TRAI to speed up is on account of two factors. First, last month, the Delhi High Court, in a landmark judgment, had quashed the communications ministry’s notification announcing September 25, 2007, as the cut-off date for granting telecom licences.

This had opened up the Pandora’s Box for the government as several of the 24 companies, which were denied licences on account of this cut-off date, are planning to drag the communications ministry to court. These 24 companies, which between them had filed about 343 applications, were denied licences on the basis of this cut-off date.

Several of these companies have alleged DoT changed the cut-off date to September 25 so that only a few select Indian companies, such as Swan, Unitech, Loop, Datacom and Shyam, get licences. So far, DoT has provided no explanation for changing the cut-off date.

While the DoT has now challenged the Delhi High Court order of quashing the September 25, 2007 dateline as the cut-off for applying for telecom licences that come bundled with start-up 2G spectrum, the communications ministry urgently needs favourable recommendations from the regulator to strengthen its case.

This is also the primary reason behind the DoT’s move to emphasise to TRAI that even as there were 343 pending applications (from 24 companies) for telecom licenses, there was already sufficient competition as there were already between 12 and 14 operators offering mobile services in every circle.

The second reason behind the DoT’s move to seek a quick reply from TRAI is that earlier this year, the telecom tribunal (TDSAT), had said it was ‘puzzling as to why TRAI recommended a no cap policy on the number of service providers’, while adding that the ‘DoT would be well advised to review this policy.’ The DoT has now pointed out that keeping in view of the TDSAT order and ‘since the growth in the telecom sector was of very critical importance to the nation’, TRAI must adhere to the 60-day deadline.

However, industry watchers say that the DoT is only taking cover under the tribunal’s directive, while adding that the real motive behind asking TRAI to speed up was because that the Delhi HC ruling had exposed the communications ministry.

Chennai-based S Tel had then approached the Delhi High Court after the company was granted licences for only six circles. The reason cited was that the company had applied for licences in the remaining 16 circles after September 25, but before October 1, 2007. DoT had not processed S Tel’s applications for the remaining circles because these had come in after the cut-off date.

S Tel had then demanded that DoT offer an explanation for unilaterally setting September 25 as the cut-off date, when DoT itself had earlier announced that October 1, 2007, would be the deadline. The Delhi HC in its judgement then set aside the DoT notification stating September 25, 2007 as the cut-off date.