TRAI has recommended a one-time entry fee for the operators and has restricted entry only to those players whose promoters have a combined networth of Rs 1000 crore for A and B circles. In a significant recommendation, it has also proposed that it should be mandatory for the basic service providers to provide inter-connectivity to National Long Distance (NLD) operators. It has also said that MTNL and DTS should also pay licence fees, like other players. TRAI has also sought to exempt infrastructure providers from having to obtain licences.

For the existing six players, TRAI has recommended that licence fee due under the earlier arrangement up to the date of migration, i.e., 31.7.99, should be reckoned as their entry fee. For the new operators, in these circles, the basis for payment of entry fee shall be the same as that in the other 15 Circles.

For the 15 vacant circles, the TRAI has recommended a stringent criteria for roll-out and stipulation of a reasonable level of revenue share, entry fee, and performance bank guarantee to ensure spread of tele-density in the service area.

Selection criteria
To eliminate non-serious players, the Authority has recommended roll-out obligation to cover the entire service area in a stipulated time-frame. It has also recommended a minimum combined net-worth of co-promoters of the joint venture to be at least Rs 1000 Crore for all category A and B cricles. The exception to the above is Kerala, Punjab and Haryana, where a figure of Rs 700 Crore is being recommended.

For category C Circles, the Authority has recommended a figure of Rs 500 crore, except for the Himachal Pradesh, J&K, North East where a figure of Rs 200 Crore is being recommended. TRAI has also said that at least one of the co-promoters having more than 30 per cent equity in criteria for telecom operators the company should have an experience in the telecom sector.

Licence fee
The Authority has recommended a licence fee of 12 per cent (in circle A), 10 per cent (in the B circle) and eight per cent (in the C circle), for all the new and existing operators, including MTNL and DTS.

Roll-out obligations To weed-out non-serious players, a minimum pace of roll-out is stipulated. The bank guarantees provided by the new entrants for guaranteeing fulfillment of the network roll-out obligation will be released in phases on the concerned BSO succeeding in meeting his obligation which is included in the licence.

As per the roll-out obligation by the end of the 5th year, every existing basic service operator or a new entrant will individually have to achieve 80 per cent coverage in terms of point of presence at SDCA level.

Resale
TRAI is not recommending resale of circle as of now. However, the Authority will review the situation, once the market matures and unbundled costs are available.

Infrastructure Providers
The infrastructure providers would not be required to obtain any licence, as per the recommendations. However, if the infrastructure provider would need to obtain a licence under Indian Telegraph Act 1885, either a suitable legal amendment may be made in this regard, or, if that is not immediately possible, a simple registration as infrastructure provider should be considered adequate.

NLD access arrangement
Suitable access arrangement will be made by the basic service operators so that their customers are able to access with equal ease all NLD operators in the respective circles for carriage of their inter-circle call and ISD calls as soon as competition is introduced in the sector. The recommendations also say that the basic service operators should provide billing services to NLD service providers on reasonable terms, which shall be negotiated mutually.

Carriage charges and inter-connectivity
According to TRAI, carriage charges in a multi-operator environment should be based on the unbundled costs of the network elements used in the carriage of the call in each network segment. It has recommended that it should be made mandatory for all operators to provide inter-connection to NLD Service Providers. TRAI is also in favour of permitting direct inter-connectivity amongst all service providers in the same service area. Each basic service provider will have the right to interconnect with DTS and other service providers following the principle of transparency and non-discrimination.

Separation of accounts
TRAI recommends that all incumbent operators including MTNL and DTS at the circle/metro level should maintain separate accounts in regard to basic service operation so that a comparative study and their costing for the purpose of regulatory control and review is possible.