National Telecom Policy 2011
The new telecom policy draft 2011 was released yesterday by the Telecom Minister, Kapil
Sibal. It was a qualitative extension of the proposed draft in February 2011. Following are
the key highlights of the policy:
One Nation-One Licence – This implies the abolition of roaming charges within the
country. As per TRAI, currently GSM operators derive ~8% of their wireless revenue from
roaming, out of which ~50% is from international roaming. Therefore, effectively 4% of
revenue, which is from national roaming, will be at risk. This might impact the earnings
of telecom players in the near term.
Delinking of licence fees and spectrum charges – Previously, licence fees was inclusive of
spectrum up to 4.4MHz; but after delinking, separate charges will be levied to avail
spectrum along with licence fee. This will increase the capex outgo for companies from
2015 when regional licences would come up for renewals.
Under the Spectrum Act, the ministry intends to deal with all issues related to mobile
permits, including re-farming, pricing of spectrum, withdrawal of allotted spectrum and
norms for sharing and trading. Re-farming will increase the capex outgo for all
companies as they will have to shift from 900MHz spectrum to 1,800MHz.
All future spectrum allocations will be priced at market rates.
At this juncture, the possible financial impact will be due to the one nation, one-licence
proposition. Other propositions are still in the nascent stage and we expect some discreet
decisions on this only by December 2011
The new telecom policy draft 2011 was released yesterday by the Telecom Minister, Kapil
Sibal. It was a qualitative extension of the proposed draft in February 2011. Following are
the key highlights of the policy:
One Nation-One Licence – This implies the abolition of roaming charges within the
country. As per TRAI, currently GSM operators derive ~8% of their wireless revenue from
roaming, out of which ~50% is from international roaming. Therefore, effectively 4% of
revenue, which is from national roaming, will be at risk. This might impact the earnings
of telecom players in the near term.
Delinking of licence fees and spectrum charges – Previously, licence fees was inclusive of
spectrum up to 4.4MHz; but after delinking, separate charges will be levied to avail
spectrum along with licence fee. This will increase the capex outgo for companies from
2015 when regional licences would come up for renewals.
Under the Spectrum Act, the ministry intends to deal with all issues related to mobile
permits, including re-farming, pricing of spectrum, withdrawal of allotted spectrum and
norms for sharing and trading. Re-farming will increase the capex outgo for all
companies as they will have to shift from 900MHz spectrum to 1,800MHz.
All future spectrum allocations will be priced at market rates.
At this juncture, the possible financial impact will be due to the one nation, one-licence
proposition. Other propositions are still in the nascent stage and we expect some discreet
decisions on this only by December 2011
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