New telecom licence norms delink spectrum from permit, ban cross-holding

The government today unveiled long-awaited unified licence norms that provide for delinking of spectrum from operational permits and allows companies to offer services using any technology.

The new licence regime will also allow companies to offer intra and inter-circle roaming, but bars operations from acquiring subscribers in areas where they don't own licence.

All telecom companies will have to migrate to the new licencing regime upon the expiry of their current permits. They will have to pay a licence fee of 8 per cent of annual revenue from telecom services.

Telecom companies would be allowed to offer mobile and fixed-line services using any technology. They can also provide Internet TV services. The new licences will be valid for 20 years, and would be renewable for another 10 years.

The licence agreement unveiled by Department of Telecom bars telecom service providers from holding any beneficial stake in other operators in the service areas they operate.

"In the event of holding/obtaining access spectrum, no licensee or its promoter(s) directly or indirectly shall have any beneficial interest in another licensee company holding "access apectrum" in the same service area," the norms say.

The move impacts companies like Reliance Communications and Vodafone, who have permissible stake of less than 9.9 per cent in other telecom firms under the previous licencing regime.

RCom has stake in Reliance Telecom (RTL), which has permit for providing GSM services in eight telecom circles, of which six service areas -- Bihar, Odisha, Madhya Pradesh, West Bengal, Himachal Pradesh and Kolkata -- are common with RCom.

RTL licences are due for renewal in December 2015. Vodafone also holds around 4 per cent stake in Bharti Airtel, which is within the permissible limit.

Telecom operators opting for unified licences will have to pay maximum of Rs 15 crore for providing all telecom services while there are separate one-time entry fees for firms opting to provide select services like national long distances and Internet services. Applicants opting for unified licences will have to provide maximum performance bank guarantee of Rs 220 crore.