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D.S. Mathur, Telecom Secretary

Thomas K. Thomas

New Delhi, Dec. 16 The Department of Telecom has told the Finance Ministry that it had fixed the entry fee for dual technology licence based on the recommendations of the telecom regulator and in view of the powers vested with the DoT by the Union Cabinet in 2003.

In a letter written to Dr D. Subbarao, Finance Secretary, Department of Economic Affairs, Ministry of Finance, Mr D.S. Mathur, Secretary, DoT, said, “As per the Cabinet decision dated October 31, 2003, accepting the recommendations the Group of Ministers, headed by the then Finance Minister, it was inter alia decided that the recommendations of the TRAI with regard to implementation of the Unified Access Licence regime for basic and cellular services may be accepted, DoT may be authorised to finalise the details of implementation with the approval of the Minister of Communication and IT in this regard, including the calculation of the entry fee depending on the date of payment based on the principle given by TRAI in its recommendations.”

“The dual technology licence was issued based on TRAI recommendations of August 2007. TRAI in its recommendations dated August 28, 2007 has not recommended any change in the entry fee/annual licence fee and hence no changes were considered in the existing policy,” the DoT letter said.

The DoT response, sent on November 29, follows a communication from the Finance Ministry asking for a stay on the decision to allow dual technology. The Finance Secretary, in a letter dated November 22, had asked DoT to justify how it was taking an entry fee of only Rs 1,650 crore from operators in 2007 as this amount was fixed in 2001.

In response, Mr Mathur said, “The entry fee was finalised for UAS regime in 2003 based on the decision of the Cabinet. It was decided to keep the entry fee for the UAS licence the same as the entry fee of the fourth cellular operator, which was based on the bidding process in 2001.”

There has been much debate on the correct price for spectrum over the past few months with some of the players offering to pay as much as Rs 6,000 crore.

The telecom regulator has separately told DoT that the value of spectrum is much higher than what it is being charged from operators at present.

The Prime Minister has also said that spectrum policy should be one that does not lose sight of the revenue generation potential for the Government. The Communications Ministry has, however, so far resisted moves to change the existing norms.

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