The legal cell of the department of telecommunications has endorsed Communications and Information Technology Minister Dayanidhi Maran's stance, saying long-distance operators will not be given any compensation following the government's decision to usher in a new national and international licence regime.
The legal cell has further said the government's proposal to reduce entry fee for new entrants into the sector will not apply to the existing telecom players. "It appears that the reduction of entry fee for the new licencees ipso facto may not apply to the existing operators. Of course, taking the decision otherwise is a policy matter for the DoT," it said.
The country's three private long-distance operators -- Reliance Infocomm, VSNL and Bharti -- had sought a compensation of Rs 2,805 crore (Rs 28.05 billion) from the government to allow new entrants into the sector.
Stating that the final decision rested solely with the DoT, the legal cell has said that "there may be a situation when the DoT may think it fit to liberalise the licence regime by inviting more players, or may think it fit to take tough measures to regulate or control the regime by imposing strict conditions of a licence agreement".
In the draft new licence policy, the DoT proposes reducing the entry fee to Rs 25 crore (Rs 250 million) from the existing Rs 100 crore (Rs 1 billion), reducing net worth requirements of a licencee to Rs 625 crore (Rs 6.25 billion) from the Rs 2,500 crore (Rs 25 billion) at present and setting the revenue share licence fee at 6 per cent instead of the existing 15 per cent. The new regime is also likely to waive the performance bank guarantee of Rs 400 crore (Rs 4 billion) and rollout obligations.
Maran had accused the three private players of forming a cartel and said the DoT would not allow this to happen.
