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SC issues notice to Indian Govt, TRAI & Reliance Jio over voice services by 4G players

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The Supreme Court has issued notices to the Indian government, Telecom Regulatory Authority of India (TRAI) and Reliance Industries’ data services venture Reliance Jio Infocomm (RJIL) over the government’s decision to allow RJIL to offer voice services on its 4G spectrum, reports The Times Of India.

The apex court has apparently sought a response from the government and TRAI on the PIL (Public Interest Litigation) filed by the lawyer and senior Aam Aadmi Party leader Prashant Bhushan which had challenged the government’s decision to allow 4G players offer voice calls services on their network by paying an additional fee of Rs 1,658 crore.

Bhushan claimed that through this move, the government had violated the Supreme Court’s February 2012 judgement by providing a backdoor entry to Reliance Jio Infocomm to offer voice telephony services without auction at the price determined way back in 2001. He notes that this price was rejected by the Supreme Court in its February 2012 judgement which had cancelled 122 2G licenses issued to nine telecom operators.

It’s worth noting that Cellular Operators Association of India (COAI) had also raised similar allegations in March 2013, claiming that telecom department had proposed these policy changes to give undue benefits to RIL and the unified license regime should not be used to provide a backdoor entry for BWA players to offer voice services. The Indian government however had dismissed these allegations later.

While we are yet to receive a response from Reliance Industries, the company had informed BSE (pdf) on Friday that it is yet to receive notice of any petition filed by Prashant Bhushan. It said – “We have not received any notice of any petition so far filed by Prashant Bhushan. This appears to be one more in a series of attempts to create a controversy in a next-generation foray which Reliance is determined to create in the service of the nation”

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Spectrum Usage Charge Not Revised

The petition also noted that the government hasn’t revised the spectrum usage charges for operators with broadband wireless access (BWA) spectrum to match existing operators providing voice services, which has “not only provided undue advantage to Reliance, but it has also caused huge loss of revenue to the government for the 20-year licence period.”.

Note that the empowered group of ministers (EGoM) had retained the spectrum usage charge for BWA players at 1% of their annual gross revenues earlier this year, although it had mentioned that these players will have to pay a usage charge of 5% for the new spectrum acquired during the February 2014 spectrum auction.

Cellular Operators’ Association of India (COAI) Director-General Rajan Mathews however had expressed concerns on this, saying that 4G players should also pay the same usage charge as GSM operators, especially now that Reliance Jio has received pan-India unified license through which it can offer voice services to its consumers, thereby creating an unlevel playing field.

Vodafone India had also sent a letter to the Department of Telecom (DoT) and Ministry of Communication and Information Technology in January 2014, seeking a level playing ground between 3G players and BWA players since it believes that there is now no distinction between services that will be offered on 3G and BWA network.

In the following month, Reliance Jio had secured 78.8 MHz of spectrum in 1800 MHz band for Rs 11,054.41 crore in the 2G spectrum auctions. The company had stated plans to using this spectrum to address the expected increase in demand for digital services and improve its in-building coverage.

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DoT defends its decision

Meanwhile, DoT has defended its decision of giving an unified license to Reliance Jio and has denied providing any favour to the company, as per a The Economic Times report.

It mentioned that the notice inviting applications for the 2010 BWA auction, didn’t restrict bidders from providing voice services. This was in response to Comptroller and Auditor General’s allegations that DoT had provided an undue benefit of Rs 22,848 crore to Reliance Jio by allowing them to convert their ISP license to an unified license.

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