Sibal to meet telco chiefs tomorrow

Sibal to meet telco chiefs tomorrow

Seeking clarity on pricing of spectrum and allocation, CEOs of five top telecom operators including Bharti Airtel, Reliance Communications and Idea Cellular will be meeting Telecom Minister Kapil Sibal tomorrow.

The high level government-industry interaction would take place for the second time within less than two months. The industry leaders, including Sunil Bharti Mittal, Anil Ambani and Kumar Mangalam Birla had met Prime Minister Manmohan Singh on November 30 on the same issues.

"Tomorrow's meeting will have a wide-ranging agenda. Issues like pricing of spectrum (telecom airwaves) and allocation would also be discussed," an official in the Department of Telecommunication (DoT) said.

The other contentious issue like the government seeking one-time fee for 2G spectrum in excess of 4.4 MHz and row over 3G roaming would also figure in the talks, he said.

The industry is opposing the government move to charge one-time fee on spectrum beyond 4.4 MHz for GSM operators and 2.5 MHz for CDMA players. If the fee is levied, their bottomline could be impacted by approximately Rs 17,000 crore.

The operators have contended that such a move would dent growth and discourage fresh investment in the sector which has over 800 million subscribers' base.

The industry has been demanding that there should be a clarity and stability in the contracts between the government and the operators.

However, as for the future allocation of 2G airwaves (due for first renewal in 2014) the established operators across the two technology platforms (GSM and CDMA) are willing for an auction.

There is also a concern over the banks refusing to lend to the industry as a fall-out of the 2G scam. The industry wants the government to direct the banks to restore lending and build confidence in the scam-ridden sector.

Another issue facing the industry is the need for mergers and acquisition guidelines as the licensing circles are over-crowded with as many as 13-15 operators per circle. Several of the service providers are struggling to survive and seem to be desperate for exit, which is not provided in the existing policy.

The intra-circle 3G roaming agreements is also a bone of contention between the DoT and the operators, including Bharti, Vodafone, Idea and Aircel.