New Delhi: Amid controversy over allocation of the 2G spectrum, the Central Government on Monday said that all licenses are proposed to be renewed after 10 years instead of 20 years from now onwards.

The details will be provided in the National Telecom Policy-2011 (NTP-2011) which is slated to be announced by the end of the year.
The telecom companies will have to file an application in two-and-a-half months before the renewal of the telecom licenses, says the government.

Telecom Minister Kapil Sibal said, "The telecom companies under the (proposed) NTP-2011 will have to file an application 30 months prior for the renewal of the telecom licenses so that the government gets enough time to take an effective decision.”

According to the new NTP-2011, government calls for liberal mergers and acquisitions in the telecommunication sector. And, a minimum of six competitors will be allowed in each circle, including BSNL.

The announcement of Telecom Minister may raise the cost of communication facilities. As per the new policy, companies will have to pay fees for license and spectrum separately. The fees will be decided at the market value which means that the cost of the company will rise and at the same time it will have to be recovered in a period of 10 years.

Experts believe if the government brings this policy into effect, it will directly benefit those companies which secured spectrum rights in 2007-08 from the then tainted minister A Raja. Since their licenses are valid till 2028.

The policy will be applicable on leading companies like Airtel and Vodafone since their license will expire in few years. They will have to cough up extra charges for the renewal of license.

Kapil sibal pointed out that the license renewal fees will be decided by the proposal of Telecom Regulatory Authority of India (TRAI).

JPN/Bureau