Undue favours to new telecom players? DoT says No!

Are the new entrants to telecom field being unduly favoured by the telecom Ministry?

An adage which is much older than the Indian Telegraph Act 1885 says that you cannot compare an apple with an orange. Even in telecom, an Orange (pun unintended!) has to be compared with an orange. That is what level playing field is all about, says a top telecom ministry official.

Asked to comment on the widespread allegations that certain new telecom players like Swan and Unitech have been unduly favoured as they secured spectrum on the basis of fee pegged in 2001, the official explained that the price has not yet been changed ever since deliberately.

“One has to keep in mind the government’s overall objective of growth, affordability and even penetration of wireless service in small towns and rural areas,” he said and pointed out that even TRAI does not favour any change in the fee structure and auction for spectrum.

The unchanged license fee also serves as incentive to telecom players to extend their networks to relatively low-revenue semi urban and rural areas. Otherwise, the government would have to subsidise the rural network expansion, the official said.

Even when the Cabinet decided on pricing for the fourth operators in 2003, it was based on TRAI recommendation and the same principle was applied last year when the new entrants were given licenses.

The government fully respected the telecom industry’s argument for a level playing field for all players and hence did not impose any restrictions for its growth. “This has also immensely contributed to the country emerging as the world’s fastest growth telecom market, adding over 8 million subscribers every month,” the official explained.

The country wireless subscriber base is 300 million strong today and is expected to double to 600 million mark in the next four years.

Any increase in the fee or allowing spectrum to be auctioned would in effect mean injustice to new players as it could jeopardize the tariff structures. With the telecom market witnessing immense tariff war, the new players would have been put to disadvantage visa-vis the existing players and this would have gone against the principles of level playing field, the official said.

DoT has been maintaining that the new licenses have been issued as per TRAI policy guidelines.