Rule to migrate to unified licensing coercive: COAI

The Cellular Operators Association of India (COAI), which lobbies for incumbent GSM operators such as Bharti Airtel, Vodafone India and Idea Cellular, has said the rule for migration to the new unified licensing norms is “coercive in nature”. If the government unilaterally imposed these rules on incumbent operators, it could lead to legal disputes, it cautioned.

In a recent letter to M F Farooqui, secretary in the department of telecommunications (DoT), COAI Director General Rajan Mathews said the rules for migration of licences were framed in 1999. Under the national telecom policy at that time, migration was voluntary and couldn’t be forced on any service provider. But DoT had ignored this while finalising the unified licensing regulations, Mathews said.

“Provisions of migration to unified licensing are coercive in nature, as the guidelines require compulsory migration to unified licensing in several circumstances, which infringes on the rights of our member operators to do business under the existing contracts/agreements signed with DoT,” Mathews said.

The new unified licensing norms do not differentiate between technologies such as 2G, 3G and 4G; any operator can use any technology to provide cellular services.

While Idea Cellular received unified licensing for seven telecom zones in which the company had bought spectrum through an auction in November 2012, licences of Airtel (Delhi and Mumbai) and Vodafone (Delhi, Mumbai and Kolkata) are due to expire in 2014. After this, Bharti Airtel and Vodafone will have to take UL, as the DoT has made migration mandatory.

“It is also most respectfully submitted that several of the issues are under challenge in various courts and any attempt by DoT to unilaterally enforce such provisions would tantamount to it acting as an adjudicator in its own cause,” Mathews has written in his letter to Farooqui.

The GSM lobby has also noted that DoT should have been followed the ‘no worse off’ principle while formulating the terms and conditions for the draft UL. The UL contains several one-sided provisions that would have impact on existing licence holders, it added.

It also said that DoT should have consulted the Telecom Regulatory Authority of India (TRAI) before finalising the guidelines of UL. “The guidelines should be finalised by DoT only after prior detailed discussion with the licencees in the Open House discussion with the minister (Kapil Sibal) and the comprehensive review of the issues on UL by TRAI,” Mathews noted.