Shift to authorisation regime may not be must for buying spectrum

New Delhi: The Department of Telecommunications (DoT) is likely to relax a provision in the draft spectrum allocation rules that could have barred Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) from getting airwaves in future auctions if they didn't switch to an authorisation regime.

Telcos are demanding that the current contractual agreement between an operator and DoT should continue and are resisting a shift to an authorisation regime, which lacks such an arrangement.

Operators had voiced fears around the draft rules, which if notified in their current form, would have caused problems. Sources, though, told ET that during a recent meeting between telcos and DoT the latter conveyed that the draft may be tweaked, and telcos would be able to buy spectrum, even if they continue with the current licensing regime.



ET had reported in February about the draft rules and its implications on telcos, particularly to buy spectrum in auctions.

As per the draft spectrum allocation rules, which will be notified as part of the Telecommunications Act 2023, the existing telcos or any new entrant can participate in the auction. However, after successfully bidding for airwaves, they would need to apply for authorisation within seven days of the receipt of the demand letter. In case a company does not apply for authorisation, it shall forfeit the earnest money deposit (EMD) for its participation in the auction.

Thus, the rules make it mandatory for telcos to have an authorisation to get spectrum in auctions.

"While DoT has given indications of relaxing the provision, it will be clear only when the final rules are notified," an industry executive said. The final set of spectrum allocation rules are expected to be notified shortly after industrywide consultations.

The Telecom Regulatory Authority of India had proposed a single, unified authorisation to allow companies to provide various telecom services, including mobile, internet, landline and satellite communication across the country, replacing the existing licensing regime. Framework for the authorisation is being worked out by the DoT.

The DoT will look to allay fears of telcos in shifting to the new regime. The telcos want to continue with the contract arrangement in the new regime as well, but the demand has been rejected by DoT.

While DoT has clarified it will not cancel the existing licences or force telcos to shift to the new authorisation regime, it wants companies to adopt to the new regime voluntarily. Barring existing telcos from buying spectrum could have also impacted the auction receipts as there are no buyers for spectrum other than the existing telecom operators.