DoT decides not to scrap dual-technology telecom licenses - Angel Broking

In a reprieve for holders of dual-technology telecom licenses, such as Tata Teleservices (TTSL) and Reliance Communications (RCom), the Department of Telecommunications (DoT) has decided that licenses will not be scrapped. TTSL holds 19 such licenses across the country, while RCom owns 22. Dual-technology players are those offering services on both GSM and CDMA platforms.

The decision is based on the legal advice of senior advocate P P Rao. DoT had sought his opinion after various groups, including Assocham and the Cellular Operators Association of India (COAI), besides the managing director of Idea Cellular, insisted the Supreme Court decision to cancel 2G licences should lead to scrapping of 141 Unified Access Service (UAS) licenses, instead of 122 as undertaken by the government. According to a recent communication, Rao, in an opinion dated June 15, said there were two sets of applicants. One set was of those that applied for UAS licenses till September 25, 2007, and the second of existing licensees seeking approval to use dual-technology spectrum. Rao added the SC judgment had not mentioned quashing of the approval given for use of dual-technology spectrum to the existing players that had been given licenses before the issuance of two press releases on January 10, 2008. The allocation of spectrum quashed by the Supreme Court was limited to the cancelled licenses. The existing licensees were not to be affected, as neither their licenses were cancelled nor their spectrum quashed. RCom's UAS licenses were amended on October 18, 2007, to also include offering GSM services. TTSL, on the other hand, had got its CDMA license in 2005 and was allowed in January 2008 to operate GSM services under the same license through the dual-technology route. We maintain our Neutral rating on RCom.

Source : Equity Bulls

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