Full-fledged telecom re-entry plans of Reliance Industries (RIL) have received a boost after the government cleared a proposal to allow 4G licence holders to also offer voice calling services, drawing the ire of some existing mobile operators and exposing the sector to the possibility of fresh litigation.
The Telecom Commission, the highest decision-making body in the communications ministry allowed holders of so-called 4G spectrum, until now permitted to provide only high-speed Internet services on mobiles, to offer voice calls to customers by paying an additional Rs.1,658 crore for a pan-India licence. Mukesh Ambani-controlled Reliance is the only company that holds pan-India 4G permits.
“The ISP (Internet service provider) licence holders who have broadband wireless access (4G) spectrum can provide voice services using the same frequencies if they pay the additional fee,” Telecom Commission Chairman and Telecom Secretary R Chandrashekhar told reporters, adding the framework for the new licence regime would be ready by March. These companies will be allowed to offer all forms of communication services after migrating to a so called unified licence, which aims to dismantle barriers between various types of communication services. Reaction to the commission’s decision was mixed, with a section of existing mobile operators saying it was “most disturbed” by the move, its comments potentially heralding fresh litigation that could paralyse the industry yet again.
The industry body representing firms such as Reliance Communications and Tata Teleservices, which hold CDMA and dual technology permits, said 4G spectrum had been sold at a lower price in 2010 because it could only be used for providing data services.
RIL, which paid Rs.4,800 crore to buy 95% stake in Infotel Broadband that won a pan-India licence for nearly Rs.13,000 crore in 2010, had sought the telecom department’s approval to test voice services on its 4G networks. The department’s internal committee looking into this issue has recommended that the company be allowed to test 10,000 connections and be allotted these many mobile numbers.
Airtel has also sought the government's approval for testing voice services.
A total of five companies, including Infotel Broadband, Aircel, Qualcomm India and Bharti Airtel, had won 4G airwaves in the 2010 auctions. In July 2012, Bharti said it had reached a deal to buy 49% stake in US chipmaker Qualcomm’s fourth-generation licences in India for $165 million, and would completely own the venture within the next two years. This allows the Sunil-Mittal promoted company to quickly launch 4G services in the key markets of Delhi and Mumbai making it the only serious competitor to RIL in this space.
The move to allow 4G winners to offer voice services was expected as the government had made it clear in 2011 that it plans to introduce a 'unified licence' regime as part of its plans to radically overhaul telecom rules and allow operators to offer all “forms of communication services under a single permit”. Telecom firms now need separate licences for each type of service. The 'unified licence', which seeks to allow the holder to offer mobile, landline, Internet, DTH and Cable TV services under a single permit, was also part of the new telecom policy that was unveiled by Telecom Minister Kapil Sibal last year.
4G is not a voice-oriented technology and India would be the first country to launch voice-on-4G in the 2,300 MHz frequency band. At present, voice services are not available in the 2,300 MHz band, the frequency on which 4G or Long-Term Evolution (LTE) services will be offered in the country. But voice facilities are available on other 4G bands like the 700 MHz that are used in the US and Europe.
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