DoT may impose cap on new cellular licenses

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DoT may impose cap on new cellular licenses
Bangalore: Given the scarcity in spectrum, the Department of Telecom (DoT) may stop further issuing of cellular licenses. As a first step towards this, DoT has already sought the telecom regulator's view on whether more operators should be allowed to enter the market, reports Business Line. "In view of the fact that sufficient competition seems to be already in place and spectrum is a scarce resource and to ensure that adequate quantity of spectrum is available to licensees, to enable their services and maintain the quality of service, the government is to take a view on the policy of no capping on the number of access service providers in each service area," stated a DoT letter to the Telecom Regulatory Authority of India (TRAI). A cap would close the doors on about 24 companies whose applications for new licenses are pending. Companies including AT&T, Moser Baer, Sterlite Technologies and the Hinduja Group had submitted their applications in 2007, but were not given the licenses after DoT changed the cut-off date from October 1, 2007 to September 25, 2007. Although DoT had accepted the telecom regulator's recommendation of not putting a cap on the number of mobile players, it acted contrary thereto by amending the cut-off date and placing a de facto cap on the number of service providers. However these companies recently got a reprieve after the Delhi High Court invalidated the decision by the Ministry of Communications to leave out applications submitted after September 25, 2007. The High Court further said that DoT cannot be allowed to arbitrarily change the cut-off date without any justifiable reason. Since DoT's September 25 cut-off date has been quashed, a policy change to cap the number of operators will keep out the 24 companies. According to market watchers, this move could be seen as a way to get around the Court decision.

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