Cabinet gives nod to new telecom policy

The policy proposes to delink spectrum from license

By Dinsa Sachan
Published: Saturday 04 July 2015

With the 2G spectrum scam still haunting the Congress-led government at the Centre, the Union Cabinet today approved the new telecom policy. The National Telecom Policy, 2012, has proposed to delink spectrum from licence. In the current regime, licence for telecom services comes clubbed with spectrum. But now mobile service operators will have to obtain the spectrum through an open competitive bidding.
Mahesh Uppal, telecom consultant, says this is a good move both for the industry and the government. “The government has finally realised that spectrum and licence are two different concepts. The right to set up a network is quite different from obtaining a resource to run it, which in this case is spectrum.” He adds, the spectrum prices will now reflect market conditions. “Spectrum in a busy area like Delhi will cost more than in a rural area,” Uppal notes.

Spectrum allocation is a contentious issue in the country. A Supreme Court judgement recently cancelled 122 licences for mobile networks issued in 2008 during A Raja's tenure as Union telecom minister and asked the telecom regulator TRAI to conduct fresh auction for allocation of spectrum. Licences in 2008 were given on a first-come-first served basis.

Uppal says the draft policy makes headway into the goal of auctioning spectrum in a transparent and open manner. He adds that auctions need to be well-designed. For example, government must ensure there are more players to encourage competition and lower prices.

The new policy has also called for unified licencing of spectrum which allows operators to purchase one licence and they can provide any service—mobile, landline, long-distance services, Internet and satellite, among others. This would be a pan-India permit. Currently, companies have to apply for separate licences for each type of service such as GSM, CDMA, 3G, broadband wireless (4G), Internet, Direct-to-Home (DTH) and radio. Rajan Mathews, chairperson of Cellphone Operators Association of India, says this simplifies the licensing procedure for operators.

The policy has also outlined the mechanism by which the existing companies can migrate from the current regime, which requires them to pay separately for all the services.

Though the new policy has not been made public, sources say the provision to have a separate Spectrum Act has been removed. The Act, among other things, was supposed to deal with all issues connected with wireless (spectrum) licences and their terms and conditions including re-framing, withdrawal of allotted spectrum, spectrum pricing, cancellation or revocation of spectrum licence, exemptions on use of spectrum, spectrum sharing and spectrum trading.


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