Unified Licensing regime put in-place by the Department of Telecom

The Minister of Communications and Information Technology, Kapil Sibal had on August 2, 2013, announced the implementation of the Unified Licensing Regime on the sidelines of the National Telecom Summit (Our previous post on “Unified Licensing regime in India likely soon: Department of Telecom” here). This announcement is in furtherance to an objective laid down by the National Telecom Policy 2012.

Pursuant to this announcement, the Department of Telecommunications (“DoT”) unveiled the Unified Licensing Regime. The new regime would allow the licencees to offer all telecom services under one license opposed to the existing regime of separate licenses.

The DoT has issued the draft of the License Agreement for Unified License (“UL License Agreement”) that would have to be executed by the service providers, in order to be able to provide the telecom services. However, the DoT would issue the Guidelines for Unified License within 10 days.

The UL License Agreement stipulates separate service authorizations for provision of the different telecom services under the Unified License. The licensee shall at the time of making the application, have to specify the proposed services and service authorisation. The scope of service and specific terms and conditions for each service has been prescribed under the UL License Agreement.

Additionally, the licensees under the regime would be able to share active infrastructure, which is not permitted presently. Under the current regime, the service providers are only permitted to share passive infrastructure.

The Unified License has freed the spectrum from the license. It also allows the licensees to enter into roaming pacts in any service area irrespective of the spectrum band held or technology used, not allowed earlier. Under the regime prior to the introduction of the Unified License the telecom companies were allowed to hold up to 10% equity in another telecom company operating in the same circle. Since, the Unified License bars such cross-holding between telecommunication companies, the same is likely to have an impact on the existing telecom operators as well.

The existing telecom licensees shall not hold any other license for the services covered under the scope of the License Agreement for Unified License. The telecom operators would necessarily have to migrate to the new licensing regime upon the expiry of their existing permits.

Further, Kapil Sibal also stated that the Mergers and Acquisition guidelines would be in place by September.