EGoM decides on roll-out obligations for telecos

New directives: Operators have to cover 10 pc of the block-level HQ within first year

A high-level ministerial committee headed by Home Minister P Chidambaram on Wednesday decided that the telecom operators who bagged spectrum through auction would have to roll-out services in 30 per cent of block level headquarters in five years.

The Empowered Group of Ministers (EGoM) on Telecom decided that for those players who acquire fresh spectrum, the roll-out obligations will include covering 10 per cent of the blocks in the third year, 20 per cent of the blocks in the fourth year and 30 per cent of the blocks in the fifth year.

As per the existing norms, operators have to cover 10 per cent of the district headquarters within the first year of allotment of spectrum.

Earlier, the Telecom Regulatory Authority of India (Trai) had recommended that operators should cover 50 per cent of the villages having a population of over 2,000 in three years and 100 per cent in four years, from the date spectrum is allocated. However, the recommendations did not go down well with the industry which contended that the move will burden them.

However, the committee did not take any decision on the crucial issue of fixing base price for spectrum. Though the issue was discussed, it was decided that Department of Telecom (DoT) should submit a detailed report to the EGoM about a matrix of various levels of reserve price and spectrum usage charge, at every Rs 1,000 crore difference in descending order, and the impact it would have on tariffs for the consumer and the revenue accrued to the government.

The same is to be presented to the EGoM in its next meeting on July 20. Trai had recommended a minimum reserve price of over Rs 3,622 crore for auction of one Mhz of spectrum in the 1,800 Mhz band, amounting to over Rs 18,000 crore for pan-India operations in case of a new entrant, for 5 Mhz.