Bharti Airtel welcomes new telecom policy, wants govt to cut licence fee to 6%

By Telecom Lead Team: Mobile service provider Bharti Airtel has welcomed the new telecom policy that will be announced in April 2012.

We welcome the much awaited policy guidelines announced
by the  Minister today. These guidelines will benefit the telecom sector
immensely in the long run,” Airtel said in a statement.

The decision to apply uniform licence fee across
different telecom licences and service areas is a welcome step and will help
avoid any arbitrage opportunity. Airtel hopes that the government considers
bringing down the licence fee to 6 percent over the next couple of year, as
recommended by the TRAI.

The announcement on merger & acquisition is an
encouraging step from the point of view of the long-term health of the telecom
industry and will pave way for consolidation in an over-crowded market.

Allowing sharing of spectrum is also a step in the right
direction. The government should also consider allowing spectrum sharing in all
the bands. However, the higher spectrum usage charge, which is applied on the
total spectrum held by both the operators, will act as a deterrent to sharing.
We hope the government will review this.

“We welcome the government’s intent to initiate a
comprehensive study on the adequacy of USOF and the need for augmenting USOF
schemes with appropriate direct incentivisation as this will help bring in much
needed investment in this area,” said a press statement from Airtel.

According to Kabil Sibal, India will announce its telecom
policy (National Telecom Policy 2011) in April 2012.

The government has decided to allow mergers and
acquisitions where the resultant entity won’t have a market share of more than
35 percent or over 25 percent of bandwidth in a telecom service area.

As per the proposed policy, mobile operators will also
now have to pay a unified license fee across all telecommunication services at
8 percent of adjusted gross revenue. Telecom operators currently pay 6
percent-10 percent of their revenue as license fees for basic mobile services,
depending on the areas they operate in.

India will allow mergers and acquisitions in the telecoms
sector that create combined market share of up to 35 percent, under a quick and
simple process, according to communications Minister Kapil Sibal.

All service providers will be allowed to hold higher
spectrum of up to 10 MHz, a move that would help them offer quality services.

The prescribed limit on spectrum assigned to a service
provider will be 2×8 MHz (paired spectrum) for GSM technology for all service
areas other than Delhi and Mumbai where it will be 2×10 MHz (paired spectrum).
Current prescribed limit is 6.2 MHz of GSM spectrum.

However, players will be free to acquire additional
frequency beyond the prescribed limit, in the open market, should there be an
auction of spectrum subject to the limits prescribed for merger of licences, according to Reuters and PTI reports.

All spectrum would be delinked from the licence from now,
he said, adding that a decision on pricing of spectrum or one-time charge for
extra spectrum held by some incumbent operators will be taken later in view of
the Supreme Court judgement that cancelled 122 2G licences issued in 2008.

The renewal of licence would be done for 10 years.

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