The investors of telecom firms have a good news that now all the past months hurdles that dogged telecom sector have now being removed after Govt’s new telecom policy new telecom policy welcomed as a step forward.
A new telecom policy will have some norms of a uniform licence fee and making spectrum tradable at market-linked rates, to which the government should move with some exceptions in the right direction.
The policy has dealt with some recommendations of the sector regulator like restriction on 3G Spectrum sharing is one such area. As per key policy measures, telcos operating will be allowed to share 2G spectrum and all future allocation of airwaves will only be through auctions. And Future licences will be delinked from spectrum and companies must buy bandwidth at market rates.
Having adverse effect on consumer, Companies can now share 2G spectrum only in the same service area with others that hold spectrum in that area. The maximum airwaves that companies can hold have been enhanced to 8 MHz in all regions as compared to previous 6.2 MHz held by GSM companies. But Delhi and Mumbai, limit is at 10 MHz. There is the limit at 5 MHz and 6.25 MHz, respectively for CDMA operators.
The new rules that come into effect from today welcomed by both Bharti Airtel and Vodafone India ensured that these guidelines will benefit the telecom sector immensely in the long run. Companies can justifiably argue that they bid for 3G spectrum on the assumption that it could be shared.
Announcing the policy, Communication minister Kapil Sibal said that licenses of Bharti Airtel and Vodafone Essar that are coming up for renewal beginning 2014 will be ‘automatically extended for another 10 years’ but all details, including pricing of spectrum will be worked out before 2014 with fixed 8% uniform revenue share.
Sibal informed, “All companies must migrate to the unified licence, whose details will be unveiled by Trai soon.”
Reviewing the Supreme Court judgment of cancellation 122 telecom licenses in 2G scam in 2008, the govt treated it as a terrible signal and a threat over telecom sector. A new taxation law will also be increasing uncertainty in the sector.
Therefore it should be needed to step forward towards treating spectrum as a marketable, tradable commodity that will provide the gains in efficiency and transparency in form of merging.
Govt’s intension to put the scam-tainted telecom sector back on track has showed by a move of new policy that will help to clean up telecom by reducing the uncertainty to which it had been exposed.