Telecom licensing rules to be revamped
After coming out with a comprehensive set of reforms ranging from providing immediate cash flow relief to the financially stretched telecom operators to addressing long-term structural issues, the government will now focus on rationalising the complex regulatory and licensing regime, telecom minister Ashwini Vaishnaw said.
In an interview with FE, Vaishnaw said the aim will be to make regulations ‘light-touch, focused on customers, on common people, and on marginalised sections of the society’.
‘There is a complex licensing regime in the telecom industry, which has been there for decades. We will look at rationalising it. We will benchmark where our regulations stand vis-à-vis the global regulations. Prime Minister Modi’s vision is that the Indian telecom industry should be benchmarked with the world,’ Vaishnaw said.
He, however, did not divulge which all licensing and regulatory matters will be reviewed.
Vaishnaw further said the government has already started working on the next set of reforms in the telecom sector, which will address the issue of litigations with the industry. Currently, there are a large number of litigations between the government and telecom operators and a mechanism is being worked out to resolve them. ‘We are studying them and will try to figure out if it’s possible to solve them in a Vivad-se-Vishwas framework. Net net, we will try to resolve the litigations with the industry,’ the minister said.
He said litigations happen mainly because of two things – first, calculation of taxes, and second, cause of the tax is disputed. The government will take a deep look at each of these items and identify the root cause of the problem. ‘Within a time frame of six months, we will have a second round of telecom reforms,’ Vaishnaw said.
On October 5, the Department of Telecommunications (DoT) indicated before the Supreme Court that it is likely to withdraw the case relating to one-time spectrum charges (OTSC) amounting to Rs 40,000 crore against the telecom operators.
Talking about the recently announced reforms, the minister said the whole purpose was that the government wanted to reach out to the marginalised people and that’s not possible if the industry was unhealthy. ‘If the industry is strong and sound, we can reach out and provide telecom services in remote places in Odisha, Chhattisgarh, Jharkhand, North East, Ladakh and areas in Kashmir Valley. For that, we need a strong industry. Our thought process is that we have to strengthen the industry by bringing structural changes,’ Vaishnaw said.
Further, with 5G round the corner, massive investments would be needed and any bottlenecks in the path of investments have to be removed. ‘We have to create a system by which people feel certain about their business model. In the absence of investments, 5G rollout will suffer, so keeping all these things in mind, we addressed the adjusted gross revenue (AGR) issue, removed spectrum usage charge (SUC) from future auctions, increased the duration of spectrum to 30 years, removed the bank guarantee requirements, removed the floor on SUC and allowed 100% automatic FDI in telecom,’ the minister added.
The telecom operators can also expect realistic reserve prices for the upcoming spectrum auction as the government wants services to be affordable. ‘Our thought process is that the telecom industry has an element of public good. The Covid period showed how important this sector is for the society. The Telecom Regulatory Authority of India (Trai) is to complete its consultation process. When we take our final call, it will be based on ensuring that telecom’s public good element is preserved and services remain affordable. The reserve prices should be realistic,’ Vaishnaw said.
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