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HomeArticlesIntroduction of Cat B Universal Licence for each District
Wednesday, 05 April 2017 13:17

Introduction of Cat B Universal Licence for each District

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TRAI issues Consultation Paper on ‘Introduction of UL (VNO) for Access Service authorization for category B license with districts of a State as a service area’

Over the last two decades, the licensing regime for access services has witnessed periodic transformations to accommodate technological evolution and changing market requirements. One of the strategies envisaged in the NTP-2012 has been to move towards a Unified License (UL) regime to exploit the benefits of convergence, spectrum liberalisation and facilitate delinking of the licensing of networks from the delivery of services so as to enable the Telecom Service Providers (TSPs) to optimally and efficiently utilise their networks and spectrum by sharing active and passive infrastructure.

 The Telecom Regulatory Authority of India (TRAI), on March 20, has released a Consultation Paper on "Introduction of UL (VNO) for Access Service authorization for category B license with districts of a State as a service area". The Department of Telecommunication (DoT), through its reference dated 11th July, 2016, has requested TRAI to issue recommendations for Access Service authorization for category 'B' license with districts of a State as a service area for Virtual Network Operators (VNOs). In 1994, DoT introduced a scheme of operation called Direct Inward Dialing (DID) to provide facilities of group EPABX by the private entities as franchisees of DoT.

The guidelines issued by DoT on 5th July, 2016 for authorization for Access service in Secondary Switching Areas (SSAs) as service area are in addition to TRAI recommendations on 1st May, 2015 on the subject. These guidelines are meant to introduce UL (VNO) Cat-B with Access Service authorization in a District of a State/UT. The guidelines issued by DoT are valid for one year. Salient features of the guidelines are:-

a. An applicant should be either a registered company or a partnership firm or an organization registered under Shop and Establishment Act or a legal person.

b. The existing DID Franchisee of any Telecom service Providers may migrate to District-wise UL (VNO) for Access Services.

c. Entry fee of authorization for migration to UL (VNO) would be Rs. (16,500/-) for one year.

 d. The UL (VNO) Category licensee shall pay license fee @ 8% of AGR, applicable spectrum Usage Charges and submit financial bank guarantees.

e. Instructions contained in DoT Circular No.4-5/93-PHB dated 27th January, 1994 and 4th March, 1994 stand withdrawn w.e.f. 1st August, 2016. Subsequently DoT amended the timeline to 31st October, 2016. 

f. All DID franchisee shall be given time upto 31st July, 2016 to migrate to UL (VNO) Cat. B for Access Service authorization or franchisee regime under UL/UASL/Basic Service License of TSP. Subsequently DoT amended the timeline to 31st October, 2016.

g. W.e.f. 1st August, 2016 all existing agreements/ arrangements, pursuant to DoT circular No. 4-5/93-PHB dated 27th January 1994 shall be treated as null and void (amended and extended the date to 1st November, 2016 by DoT on 30th July, 2016).

After issuance of guidelines, DoT has so far issued few UL (VNO) Cat- ‘B’ licenses.

TRAI Consultation Paper

Questions for Stakeholders:

Q.1- Is there any need to introduce Cat. –B VNOs in the sector? If yes, should the existing DID franchisees be mandated to migrate to UL (VNO) Cat-B based licensing regime? Do you foresee any challenges in the migration from franchisee regime to licensing regime? If no, how DID franchisee can be accommodated in the existing licensing regime in the country?

Q2. - Based on the complexities discussed in Para 13-15 above, should the scope of UL (VNO) Cat.-B licensee be limited to provide landline (voice) and internet services or should these be allowed to provide mobile service also? In case mobile services for such licensees are allowed, how the issues enlisted in Para 13-15 will be addressed? 

As recommended by the Authority, the UL (VNO) guidelines released by the DoT provide for 10 years as validity for the license. DoT guidelines for UL (VNO) Cat- B migration envisage validity for one year, since it is an interim measure pending recommendations from the Authority. Therefore, the issue is raised for the comments of the stakeholder.

Q3. - Should the license duration for UL (VNO) Cat.-B be kept 10 years which is at par with other licenses issued under UL (VNO) policy? If no, justify your answer.

Q4. - What should be Networth, Equity, Entry Fee, PBG, FBG etc. for District level UL (VNO) Cat.-B licensee in case these are allowed for Wireline and Internet services only? 

Q5. - What should be Networth, Equity, Entry Fee, PBG, FBG etc. in case Cat.–B VNOs are allowed to provide mobile access service also?

Q6. -Keeping in view the volume of business done by DID franchisees, what penalty structure be prescribed for UL (VNO) Cat. ‘B’ licensee for violation of UL (VNO) Cat.-‘B’ license terms and conditions?

Q7. - Should the UL (VNO) Cat.-B licensees be treated equivalent to the existing TSPs/VNOs for meeting obligations arising from Tariff orders/regulations /directions etc. issued by TRAI from time to time?

Q8. -What QoS parameters shall be prescribed for UL (VNO) Cat.‘B’ licensees?

Q9. -Based on the business and operational requirements as discussed should UL (VNO) Cat. ‘B’ licensees be permitted to enter into agreement to hire telecom resources from more than one TSP in its area of operation for providing voice and internet services through wireline network?

Q10.- Do you foresee any challenge in allowing such arrangement as discussed in Q9 above?

Written comments on the issues raised in the Consultation Paper are invited from the stakeholders by 17th April, 2017 and counter-comments by 24th April, 2017. Full text is available on www.cablequest.org. For details, please visit TRAI web portal.

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