The changing role of IT

For decades, the purpose of technology was to improve efficiency and pare costs. All that is changing now.

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DoT to come up with licence renewal policy, spectrum use

New Delhi: The government is planning to come up with guidelines based on which the telecom operators will be allowed to continue using the spectrum after the expiry of their licence period, reports PTI.

Telecom operators are given licences by the Department of Telecom (DoT) to offer services for 20 years. At present, there are no clear guidelines governing the renewal of licences.

DoT says on its website, "The licence for Unified Access Services (UAS) is issued on non-exclusive basis, for a period of 20 years, extendable by 10 years at one time within the territorial jurisdiction of a licensed service area."

However, there is no mention of criteria based on which the licences could be renewed.

According to sources, the government is planning to come up with a new policy for renewal of licences.

The second generation (2G) airwaves licences of most of the incumbents including Bharti Airtel, Vodafone and others will expire between 2014 and 2021.

Telecom Regulatory Authority of India (TRAI) had recently proposed that the operators should be asked to pay a renewal fee if they want to continue to offer services at the end of the licence period, that is 20 years.

Bharti and Vodafone had taken some of their licences in 1994-95 which means that they would have to pay a hefty amount in the next four years.

Earlier, Bharti Airtel, Vodafone Essar and Idea Cellular had moved TDSAT against TRAI recommendations on 2G spectrum but later on withdrew the case.

Sources said this (proposed policy) is likely to help the licensees to take a business decision. Based on this, the operators can also decide whether to continue or exit the sector.


Govt won’t dictate price of natural gas: Oil secretary

Mumbai: Clearing air on marketing freedom on natural gas, the government today said companies will continue to have the right to discover the market price of the fuel and government will in no way dictate the rates, reports PTI.

"The decision of Supreme Court in the famous case has not been sufficiently understood. What has been upheld by Supreme Court is the marketing freedom for (exploration firm)," oil secretary S Sundareshan said here.

Under the Production Sharing Contract (PSC), an explorer has the freedom to discover the market price by inviting bids from consumers in an open, transparent arms-length manner.

"The government does not fix price. The contractor has the freedom to discover the price," he said. The government only approves that.

Reliance Industries (RIL) had in 2007 submitted a pricing formula for the natural gas it planned to produce from eastern offshore KG-D6 fields for three years from 2009. The government tweaked the formula and capped the rate at $4.205 per million British thermal unit (mmBtu) for five years ending 31 March 2014.

The government initially approved the $4.205 per mmBtu rate for first 40 million standard cubic meters of gas per day (mmscmd) from Dhirubhai-1 and 3 fields in KG-D6 block but later extended to peak output of 80 mmscmd.

Also, the pricing formula for the two fields was also extended to MA field in the block, for which technically a new price discovery had to be done but the government did not allow.

"The government did not fix price of gas (from KG-D6) and the price ($4.205 per mmBtu) is not fixed in perpetuity," Mr Sundareshan said.

"Marketing freedom has been upheld by Supreme Court and government stands by its committed enshrined in PSC," he said.

Mr Sundareshan however did not mention about the government taking over the job of fixing the users of the gas.

Companies like RIL cannot choose any consumers and the same is decided by the government.

Mr Sundareshan said he saw no impact of absence of the seven-year holiday or exemption from payment of income tax from profits earned from the oil and gas produced from the areas awarded in the ninth round of the New Exploration Licensing Policy (NELP-IX). "The issue with investors is ambiguity.

There is none in this round," he said, referring to confusion over if the tax holiday would apply on gas produced from blocks awarded up to NELP-VII.

The proposed Draft Tax Code (DTC), to be implemented from April 2012, has done away with profit-linked incentives for all sectors. Instead an investment linked incentive will be available, he said.


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