Telecom

The Supreme Court of India has reserved its order on the telecom operators’ plea against the Delhi High Court order that had upheld the Telecom Regulatory Authority of India’s (TRAI) compensation mechanism for call drops. In its arguments before the apex court, TRAI had blamed telecom companies for the problem of call drops and had also accused them of behaving like a cartel. TRAI, however, has suggested that it is open to reconsidering the penalty mechanism if operators compensate call drops with an equal number of free calls.

Further, the Supreme Court has dismissed a public interest litigation (PIL) filed by a non-governmental organisation challenging the grant of a 4G licence to Reliance Jio Infocomm Limited (RJIL). The PIL had sought the cancellation of permission granted to RJIL by the government for providing voice telephony using the broadband wireless access spectrum which the operator had acquired in June 2010. The court, however, asked the government to look into the issue of spectrum usage charge applicable on the spectrum, without passing any order on the same.

The Telecom Commission has approved the reserve prices recommended by TRAI for the upcoming spectrum auction. The commission has, however, rejected TRAI’s recommendations on easier payment options for operators in the auction. The commission, meanwhile, has stated that spectrum harmonisation will be done before the auction begins. In line with this, the Department of Telecommunications (DoT) has asked all operators to start the harmonisation process from May 23, 2016 and complete it by June 15, 2016. Once complete, the harmonisation process will make 209 MHz of spectrum available in the 1800 MHz band.

DoT has notified guidelines for the liberalisation of spectrum allocated without auction. This comes after the cabinet approved the same in April 2016. As per the guidelines, the most recent price recommended by TRAI will be considered as the provisional spectrum price. Subsequent to the completion of the next round of spectrum auctions, the provisional price will be adjusted with the auction-determined price with effect from the date of liberalisation of spectrum on a pro rata basis. Further, if the auction- determined price is not available then the government will review the price for liberalisation after the auction is completed.

DoT has amended the unified access service licence agreement, allowing interconnection of internet protocol (IP)-based networks with telecom networks. At present, a telecom licence has provisions for connecting a circuit switch-based network with another circuit switch; circuit switch with IP; but not IP with IP. TRAI will now specify the interconnection usage charges for IP-based networks.

The central government has clarified that no service tax will be applicable on one-time charges paid for spectrum purchased before April 1, 2016, even if the payment for the spectrum is being made in instalments. Further, the government has exempted service tax on spectrum usage charge and licence fee payable after April 1, 2016, for the year 2015-16. This clarification comes after the government, in the Union Budget 2016- 17, announced that assignment of the right to use spectrum and its subsequent transfer will be treated as a service. DoT has made the panic button and global positioning system (GPS) facilities mandatory on all mobile handsets. As per the new rules, all mobile handsets sold in the country from January 2017 need to feature a panic button and all mobile phones sold in the country from January 2018 need to have an inbuilt GPS that will help identify the handset user’s location. The Department of Revenue has extended the anti-dumping duty on the import of telecom gear equipment from Chinese and Israeli vendors for another five years. The department had first imposed anti-dumping duty on these vendors in December 2010. As per the government’s decision, products of China-based ZTE Corporation and Alcatel-Lucent will attract anti-dumping duty of 48.42 per cent and 54.09 per cent, respectively, while those of Huawei will face a duty of 37.73 per cent. Further, all Israel-based vendors, except ECI Telecom, will need to pay anti-dumping duty of 9.42 per cent. Bharti Airtel has signed definitive agreements with Aircel and its subsidiaries, Dishnet Wireless and Aircel Cellular, to acquire the right to use 20 MHz of spectrum in the 2300 MHz band across eight circles. These circles are Tamil Nadu (including Chennai), Bihar, Jammu & Kashmir, West Bengal, Assam, the Northeast, Andhra Pradesh and Odisha. The deal is valued at Rs 35 billion.

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