NEW DELHI: In a move that may reduce your mobile bills, the government is set to approve lower spectrum usage charges for telecom companies, while also paving the way for a lenient penalty regime for minor offences, communications and law minister Kapil Sibal said on Wednesday.
Sibal said the Empowered Group of Ministers (EGoM) on telecom, headed by finance minister P Chidambaram, will consider the issue of a uniform spectrum usage charge (SUC) in its next meeting on December 2. Currently, SUC ranges between 3% and 8%, and moves up as the spectrum holding of an operator goes up. A uniform rate – recommended at 3% of revenues by telecom regulator Trai – will come as a major boost for top telcos such as Bharti Airtel, Vodafone and Idea, which have large holdings of airwaves, given the large number of subscribers on their networks.
A fixed SUC will also be helpful in making them bid aggressively during the upcoming spectrum auctions slated for January as companies will be eager to buy more radio waves without fearing about the impact on their profits due to the higher spectrum charges.
“In the ultimate analysis, the regime has to be uniform. What is the incentive for a person who is already paying 6% in acquiring more spectrum? He has no incentive,” Sibal told TOI, adding that the journey to a single tariff on spectrum holding will be spread over some years.
“We need a roadmap which we should try and clarify before the auctions, and say that the regime will be rationalized with respect to the SUC in say ‘x’ number of years. This message tells whoever participates (in the auctions) that by such date, everything will be rationalized.”
The minister said there are some “legal issues” that the government is trying to sort out now. “The government has to look into these issues in a holistic fashion. We must treat everybody in a manner that gives equal opportunities to all stakeholders. So, this issue will be decided by the EGoM.”
Speaking on the vexed issue of stiff penalties in the telecom sector, slapped by the department of telecom (DoT), Sibal said the government will come out with a more relaxed regime “very soon”. He has already termed DoT’s penalties – most of which have been challenged by the telcos in courts – as “excessive” and threatened that powers may be passed on to Trai if moderation is not shown for minor offences.
“They (penalties) are being rationalized and if they do not do so, I will give the powers away to the Trai. This has to be done. I am committed to remove the irrationality of maximization of penalties no matter what is the nature,” the minister said.
The government proposes to come out with a three-layered structure that aims at having lower penalties for minor offences like procedural lapses. “It will give succor to the market. This will happen soon.”
The government expects that an industry-friendly regime before the auctions will make the next round of airwave sale more attractive, considering that the previous two rounds did not see much action. The EGoM had last week cut the reserve price for the GSM spectrum sale by as much as 25-53% and the government hopes that the attractive pricing will help it garner at least Rs 30,000-40,000 crore through the sale.
“I expect a healthy auction this time around and there is a lot of interest… We have freed up the sector from so many controls, tried to rationalize penalties, brought about a unified licensing regime and allowed spectrum sharing and trading. Obviously, we are moving towards an entirely new regime in telecom which will give a boost to the sector.”
On the criticism by BJP leader Yashwant Sinha over lowering of spectrum reserve prices, Sibal said, “For them, the approach is heads I win, tails you lose. If we do not agree with the Trai recommendations, then we are short-changing the government. And if we agree, then also we are short-changing the government. I expect him to understand the market better.”
(Source: The Times of India, November 28, 2013)