Industry wants liberal norms

NEW DELHI, INDIA: As the telecom regulator recommended DoT on M&A deals and infrastructure sharing, the industry mulls for transparency. In the backdrop of 2G spectrum scandal, the government however is looking at consolidating the sector.

The industry bodies such as Cellular Operators Association of India (COAI), and Communication, Multimedia and Infrastructure Association of India (CMAI) have however welcomed the proposal but the former disagrees with infrastructure sharing norms.  

These recommendations came as a response to the DoT which had sought clarifications on the earlier proposal sent last year. The TRAI’s initiative will widen the scope of M&A and this proposal would be practical and promising, said COAI.

Speaking to CIOL, Rajan S Mathews, Director General of COAI, said that new guidelines would provide meaningful M&A opportunities but the association however wants assurance from the government that GSM operators would not be disadvantaged while undertaking M&A activity.

“The spectrum limit of 25 per cent per service area is an improvement on the previous recommendation of a cap of 14 MHz,” Mathews said. COAI believes that it needs to be clarified so that the total spectrum holding of CDMA and GSM are combined for UASL holders who have dual technology licenses.

The 25 per cent cap should be applied to the sum of both these spectrum amounts and it will ensure that GSM operators don’t get disadvantaged in M&A process, the association said. While CMAI believes that the regulator is addressing the complex issues of mergers, acquisitions, spectrum and migration, through this proposal.

“For the first time the spectrum has been suggested after M&A open ended by saying 25 per cent of available in particular area. The market dominance has been rightly capped at 60 per cent, said CMAI President NK Goyal.

IP-1 licensing should not be accepted, says COAI

Reacting over the IP-1 licensing for infrastructure sharing, the industry body lambasted over the regulator’s ‘double taxation’ policy. It believes that it’s an attempt by TRAI to overreach and obtain revenue from an industry that is already burdened by heavy levies and fees.

“Our position has always been that the recommendation to license IP-1 is totally without merit. Legally, we do not believe that the government has the right to license an entity such as an infrastructure company," said Mathews.

This move may however impose restrictions over operators who outsource their infrastructure such as data centers and call centers. “The recommended levies that are 3 to 6 per cent will ultimately be passed on to the service operators. Further, the notion of double taxation has been misunderstood by TRAI,” believes Mathews.

If accepted, the operators will have to pay fee twice- once at the service operator level and again at the IP-1 operator level, as a 100 per cent of the revenue of IP-1 entities comes from service operators. “We believe DoT should not accept this recommendation,” he added.