By R. Jai Krishna
NEW DELHI--India's telecommunications department Thursday
cleared a proposal to allow companies with Internet permits to also
offer basic mobile telecom services, and said the decision wasn't
aimed at favoring anyone.
A telecom industry lobby Wednesday asked the department to
reconsider the proposal. The group said the policy would allow
companies such as Reliance Industries Ltd. (500325.BY) to offer
voice services at low prices and worsen competition in a sector
that is just emerging from a margin-denting price war.
The Cellular Operators Association of India said also the
conditions set for the sale of broadband bandwidth in 2010 didn't
allow conversion of licenses.
Thursday, Telecom Secretary R. Chandrashekhar said the new rule
on allowing Internet firms to offer telecom service will be part of
a new permit policy to be announced in a month's time.
The Telecom Commission, the top decision-making body within the
telecom department, last month recommended allowing companies
holding bandwidth for wireless Internet to also offer voice
services by paying a one-time license-conversion fee.
Mr. Chandrashekhar said the commission's recommendation was
based on the suggestion of another committee. That committee last
year suggested the government to combine licenses for different
communication services such as telecom and Internet into one.
Reliance's telecom unit, Reliance Jio Infocomm Ltd., has
frequencies to provide broadband Internet across India. Under the
new rule, it will have to pay about 16.58 billion rupees ($304
million) to also provide voice services.
Reliance Jio Infocomm said Thursday there was never a barrier
for companies with Internet permits to change their licenses, or
offer voice telephone services.
"...voice services was always allowed to be provided by using
wireless broadband access spectrum, provided one holds or obtains
the relevant license," it said in a letter to the department. The
Wall Street Journal has seen a copy of the letter.
The industry lobby's director-general, Rajan S. Mathews, said
his association members stick to their stand that the new rule
allowed a "backdoor entry" for some companies.
"You were given a chance, you can't have second pie of the
apple...end of the story," Mr. Mathews said, referring to the
change in license rules for Internet firms.
The association's members include local market leader Bharti
Airtel Ltd. (532454.BY), Idea Cellular Ltd. (532822.BY) and the
local unit of Vodafone Group PLC. (VOD.LN).
Most of these companies had previously purchased separate
licenses and bandwidth for Internet and voice services.
Write to R. Jai Krishna at krishna.jai@dowjones.com
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