DoT published the final version of Unified License, which essentially de-links spectrum from a telecom permit/license and allows for all services (Mobile or Fixed Access/NLD/ILD/ISP etc.) to be provided in a single pan-India permit at a cost of Rs150mn.
At present, all telecom service providers except the recent (new) 2G spectrum [1800/800] winners have a mobile or fixed-line license (Unified Access Service License or UASL, which is service-area specific) that allows ICR arrangements involving addition of new subscribers (through sale of SIM cards) on spectrum/network not owned by the licensee. However, recent spectrum winners as well as existing UAS holders due for renewal in coming years are likely to be compulsorily migrated to the UL regime. This would compromise the position of GSM-leaders [Airtel, Voda, Idea] who have challenged the DoT ban on 3G ICR in the Supreme Court and in the TDSAT. We understand that earlier this year, Idea had challenged and got a Court stay against signing the provisional UL in seven circles (where it won spectrum in Nov-12). We believe a similar challenge is likely by Vodafone and Bharti, unless the 3G ICR issue is resolved by the Courts (either way) or the government removes this clause, subject to final Court decision
Abolition of 10% rule—implications for Vodafone Plc and RCoM
This clause has to be complied with, within one-year of signing the UL. In addition to a majority control in Vodafone India, Vodafone Plc also has an indirect 4.17% economic interest (4.39% before QFE dilution in June) in Bharti Airtel (acquired in December 2005 for Rs25-30bn), which it may be required to divest in 2015. At BAL CMP of Rs345/share, the Voda indirect stake is worth Rs57-58bn. Separately, RCOM with a 20-circle CDMA footprint, owns 100% in Reliance Telecom (RTL) that has eight GSM circles (six of them overlap with RCOM-CDMA circles) due for renewal in 2015. Under UL, RCOM may be required to merge RTLwith itself by end of 2016.