Govt rejects telcos' compensation plea

Revenue share licence fee may be reduced.

The government has ruled out any compensation to the existing private National Long Distance (NLD) operators, but is considering other options such as a reduction in the revenue share licence fee and relaxation in roll-out obligation for the existing operators to ensure a level-playing field.

Reliance Infocomm, Tata-owned VSNL, and Bharti had sought a compensation of Rs 2,805 crore from the government following its decision to bring in a new regime for the NLD licence.

They had also contended that the present rollout obligations of extending the network to all long distance calling areas, should be waived and the bank guarantees of Rs 400 crore each towards the roll-out should also be returned.

According to sources, the Department of Telecommunications (DoT) would consider the option of working out a solution akin to the concessions it had offered when it allowed WLL based limited mobility service operators to provide full fledged mobility.

Another possibility is the relaxation of norms so that it is not mandatory for these operators to extend their networks to all the 326 long distance calling areas (LDCA). Alternatively, the DoT might extend the seven-year deadline to fulfill their rollout obligations, sources said.

Sources said since existing operators have already carried network rollouts to cover 260 LDCAs, DoT could also stipulate that the network of new entrants extend to a minimum number of LDCAs.

In the case of WLL, the government had reduced the licence fee for the existing cellular operators, collected the differential fee from landline operators before allowing them to migrate to unified license and had also granted cellular operators a 2 per cent reduction in their licence fee for four years from 1 April, 2004.

The government also understood to be considering the regulatory aspect. "This is because, Telecom Regulatory Authority of India (Trai), in its recommendations on unified license, had stated that while facilitating the easy entry of operators by lowering the barrier of high entry fee, it must be ensured that the level playing field among various operators was maintained," sources said.