Learning To Live With Sanctions

Not all telecom operators are likely to migrate to the revenue-sharing arrangement under the new telecom policy. According to industry sources, for some operators the present licence fee obligations will be lower than that under the expected revenue-sharing percentage of 15 per cent of gross revenue.

Besides, those willing to migrate may not do so if their competitors choose not to shift to the new arrangement, as per the proposal put forward in the final Cabinet note. This clause leaves the field open to permutations and combinations. Even the possibility of some form of blackmail by a weaker operator against the stronger one was not being ruled out, industry insiders said.

The note proposes that each telecom operator would have the choice to migrate to the new regime. Further, in case of cellular circles with two operators, if one operator decided not to migrate, the other would have to stay on under the present licence fee arrangement.

According to industry sources, a likely case in point will be Reliance, the licence fee obligations of which for the Northeast circles are extremely low. "It is probable that our obligations under the proposed revenue-sharing percentage would be higher than that under the present regime," a company executive said. "Hence, we would have to take a decision based on the pros and cons of the new regime," the executive added.

This could also apply to Koshika Telecom, which has a front-loaded licence fee structure for three of its four circles, including UP (east), Bihar and Orissa. Koshika's decision will have a direct impact on Reliance and Essar-promoted Aircel Digilink, which are its partners in these three circles.

"We are required to pay the entire Rs 435 crore licence fee for these three circles in the first four years itself, for which there is only one quarter left," Vineet Rai, managing director, Koshika Telecom, said. "If we choose to migrate to the new regime, we'll have to pay all our outstanding till August 1, which would amount to the entire licence fee itself, except for the last quarter. Hence, we would like to keep our options on migration open," he said.

However, experts feel that all operators will eventually migrate to the new policy, because of the overwhelming advantages of the 20-ye