The Telecom Regulatory Authority of India has recommended that fixed-line operators migrating to the unified licence regime should pay the difference between the licence fee paid by them and the fourth cellular operators.

If the government accepts this recommendation, fixed-line operators looking for an all-India presence will have to pay Rs 1,200 crore (Rs 12 billion).

This is because in the fourth round of bidding, GSM operators could get an all India licence for Rs 1,600-1,700 crore (Rs 16-17 billion). Fixed-line operators paid Rs 495 crore (Rs 4.95 billion) for an all-India licence.

Trai made this suggestion in a recent presentation to the Group of Ministers, which was set up to resolve the telecom dispute between the CDMA limited mobile and GSM fully mobile operators.

Top government sources said Trai had also recommended that licensing should be abolished in the telecom sector within one year, after which the companies merely have to notify the regulator and comply with the guidelines.

Trai said as a preparatory step, wireless and wireline services could be unified in existing circles and existing fixed-line operators would be able to offer full mobility in the circle under the unified licensing regime.

Sources pointed out that the rollout obligation and the performance bank guarantee would also be the same as that of the fourth operator.

But in circles where there were no fourth operators like in Bihar, Orissa and West Bengal, the regulator has suggested that no entry fee should be charged from the existing operators migrating to a unified licensing regime.

GSM fully mobile operators, however, would not be required to pay any extra fee for the unified licence as they were already permitted to offer fixed services, Trai said.

The Trai paper has also dealt at length on the issue of spectrum allocation. It has suggested that under intra circle mergers and acquisitions, the allocated spectrum to merging operators would also get merged to ensure efficient use of spectrum.

Trai has also suggested that beyond the present spectrum allocation, there should be an increase in spectrum pricing to improve the efficiency of spectrum utilisation.

The paper said further allocation of frequency to fixed line as well as GSM operators may be undertaken through auctions.

Explaining the logic for a unified licence, TRAI has pointed out that a subscriber base of 100 million wireless subscribers would require an investment of over Rs 50,000 crore (Rs 500 billion).

The size of the market was big enough for both cellular as well as WLL operators to co-exist provided the sector was freed of litigations, the regulator said.

The presentation said that financial institutions had sanctioned Rs 8,480 crore (Rs 84.80 billion) to the telecom sector but disbursed only Rs 4,071 crore (Rs 40.71 billion).

The main fixed line operators in the country include Reliance, which has a pan India licence, Tata Teleservices (six circles), HFCL (in Punjab) and Shyam Telecom which operates in Rajasthan. Bharti also operates fixed line services in five circles but does not offer limited mobile services.

The Trai proposals

• Licensing should be abolished in the telecom sector within one year.
• No extra entry fee in circles like Bihar, Orissa, West Bengal.
• Rollout obligations & performance bank guarantees would also be the same as that of the fourth cell operators.
• Spectrum pricing and auctioning must be increased.