TRAI reviews license conditions, equity holdings

New Delhi, June 12: Telecom watchdog Telecom Regulatory Authority of India (TRAI) today released a consultation paper on 'Review of key license conditions and capping of number of access providers' here.

TRAI had emphasised the need to update the licensing and regulatory framework with technological change during the Second Telecom Regulatory meeting held a week ago in the capital.

The Department of Telecommunications (DoT) had sought recommendations of TRAI on the issue of determining the number of access providers and the terms and conditions in the access provider license.

The Department felt an urgent need to revisit the telecom policy and regulatory framework with regard to spectrum policy, investment norms, competition policy, mergers and acquisitions norms and the licensing regime for a fair, predictable, transparent and hassle-free functioning.

As far as mergers, acqisitions and transfer of licenses is concerned, TRAI has raised issues in relation to defining markets, determining dominance an market power, maximum spectrum holdings for a merged entity, cross technology mergers, minimum number of access providers in a service area as a result of mergers and acqisitions.

For substantial equity holding, TRAI's consultation paper discusses issues relating to the need and form of substantial equity clause. In the existing licensing regime, no single company or legal person can directly or indirectly have substantial equity holding.

TRAI also recommended the DoT to give permission to the service providers for offering access services using combination of technology under the same license.

The consultation paper also raises the issue of desirability, form and scale of roll out obligations to be imposed on access service providers. It also raises the issue of present practices for verification of roll out including consequential penal measures in case of non-compliance.

TRAI expressed its desire to limit the number of access service providers in a service area and determining optimum number of such service providers in the area.

All the issues raised by TRAI has led the Authority to invite all stakeholders to respond to the issues.

The telecom sector has been witnessing tremendous growth in the past few years and the subscriber base in expected to touch 500 million by 2010. Given the target, these issues need to be sorted out to provide a level playing field to all the service providers across the country.

UNI