Vodafone's licences period Delhi, Mumbai and Kolkata circles are due for renewal in November 2014
Vodafone India, the country’s second largest GSM operator, has sought extension of its licence period in three key circles — Delhi, Mumbai and Kolkata — due for renewal in November 2014.
In three letters (one for each circle) addressed to R Chandrashekhar, secretary, Department of Telecom (DoT), Vodafone mentioned that the extension was sought under Clause of 4.1 of the Unified Access Service (UAS) licence agreement.
The licences of 900 MHz spectrum come to operators with a 20-year validity. According to Clause of 4.1 of UAS, the government can extend the licence period by up to 10 years if the operator makes a request in the 19th year of the licence period.
Vodafone is in the 19th year of licence in all the three circles where it wants its licence to be extended.
The company pointed out in the letters that the extension is “expedient and in public interest”. “The 19th year of licence has commenced on November 29 for Mumbai circle and November 30 for Delhi and Kolkata circles... We request you to extend the period of our licence ...on terms to be mutually agreed,” the company said in the letters signed by T V Ramachandran, resident director (regulatory affairs and government relations) at Vodafone India Ltd. Copies of the letters were also sent to all members of the Telecom Commission.
The empowered group of ministers (EGoM) on telecom in its last meeting early this month had decided to conduct auction of the 900 MHz band of spectrum for Delhi, Mumbai and Kolkata by the end of this financial year. However, the final date of auction is yet to be announced.
Meanwhile, the government has also given the operators an option to retain up to 2.5 MHz of airwave under the 900 MHz band, if they wish to, by paying the price to be determined through the auction. However, companies will have to bid for the auction even if they want to continue with just retaining 2.5 Mhz.
In the 900 MHz band, Vodafone has 23.8 MHz of spectrum in Delhi, Mumbai and Kolkata circles. According to the Cellular Operators Association of India (COAI) data, Vodafone has 8.60 million customers in Delhi, 6.10 million users in Mumbai and 4.10 million subscribers in Kolkata as of November.
“We respectfully submit that in our view, extension of licence period is continuation of the already set up network, including continuation of existing spectrum, which is intrinsic to our licence and is being used for providing service to the customers under the licence,” Vodafone said in its letters.
It further added that for the purposes of licence extension, there can be no change in the fundamental structure of the licence.
“The license extension is fully expedient and in public interest, and the process of extension is in continuation of the existing spectrum and network setup. We hope that the DoT will initiate suitable steps for the extension, and provide on terms to be mutually agreed on,” said Ramachandran.
In the letters, Vodafone mentioned that it has so far invested more than Rs 6,000 crore in Mumbai and Delhi and Rs 1,900 crore in Kolkata service areas. In FY12, it invested Rs 433 crore in Mumbai, Rs 147 crore in Kolkata and Rs 406 crore in Delhi service areas for network enhancements.
Over the past five years, Vodafone India has contributed over Rs 8,000 crore in Mumbai, Rs 3,400 crore in Kolkata, and Rs 6,600 crore in Delhi to the government exchequer in license fees, spectrum charges, direct and indirect taxes, the company said in the letters.
