Telcos with 4G spectrum can offer voice calls by paying 1,658 crore more, move to benefit RIL


 Full-fledged telecom re-entry plans of Reliance Industries (RIL) have received a boost after the government cleared a proposal to allow4Glicence holders to also offer voice calling services, drawing the ire of some existing mobile operators and exposing the sector to the possibility of fresh litigation.


The Telecom Commission, the highest decision-making body in the communications ministry, on Monday allowed holders of so-called 4G spectrum, until now permitted to provide only high-speed Internet services on mobiles, to offer voice calls to customers by paying an additional 1,658 crore for a pan-India licence.MukeshAmbani-controlled Reliance is the only company that holds pan-India 4G permits.

"The ISP (Internet service provider) licence holders who have broadband wireless access (4G) spectrum can provide voice services using the same frequencies if they pay the additional fee," Telecom Commission Chairman and Telecom Secretary R Chandrashekhar told reporters, adding the framework for the new licence regime would be ready by March. These companies will be allowed to offer all forms of communication services after migrating to a so-called unified licence, which aims to dismantle barriers between various types of communication services.

Reaction to the commission's decision was mixed, with a section of existing mobile operators saying it was "most disturbed" by the move, its comments potentially heralding fresh litigation that could paralyse the industry yet again.

The industry body representing firms such as Reliance Communication and Tata Teleservices, which hold CDMA and dual technology permits, said 4G spectrum had been sold at a lower price in 2010 because it could only be used for providing data services.

Telcos with 4G spectrum can offer voice calls
Mixed Reaction from Telcos

The decision to allow voice services on the same frequencies now "unfairly favoured a few licensees", it said.

The Association of Unified Service Providers of India (AUSPI) said the move was unfair to existing operators and against its own position that spectrum prices be determined through "transparent market mechanisms". It added that the telecom ministry move would allow 4G spectrum holders to offer pan-India voice services by just paying a "paltry incremental amount" of Rs 83 crore per MHz, which was a "huge bonanza" since the difference between the prices of 3G and 4G airwaves, both auctioned around the same time, was Rs 1,033 crore per MHz.

But the Cellular Operators Association of India, the industry lobby group representing a majority of mobile operators using the GSM technology platform, saw no reason to complain and noted that the Telecom Commission had endorsed it line. "We had written to both regulator Trai as well as the telecom department that 4G winners must pay a migration fee of Rs 1,658 crore before they can offer voice services," said Rajan S Mathews, director-general of COAI, which counts operators such as Airtel, Vodafone and Idea as its members. "But paying Rs 1,658 crore does not entitle them to any additional spectrum, and this has been our stated position."

Source - http://economictimes.indiatimes.com