The Hindu : National : S Tel offers greater share of revenue

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Tuesday, Nov 06, 2007
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S Tel offers greater share of revenue

Special Correspondent

Commitment to spectrum efficiency

Writes to Manmohan accepting new recommendation
Willing to comply with any other fair and equitable method

CHENNAI: An aspiring new telecom player is raising the bar in the spectrum game. In a letter to the Prime Minister on Monday, S Tel Limited offered to pay the government a share of its prospective revenue, to the extent of Rs. 6,000 crore over ten years, over and above the existing spectrum charges based on revenue share.

S Tel, which has applied for telecom licences in all 22 service areas, is the first new entrant to stick its oar in the ongoing tussle between the government and GSM telecom operators over the Telecom Engineering Centre’s recent recommendations for new spectrum allocation norms.

The company is promoted by Skycity Foundations and Mauritius-based Telecom Investments and says it is in talks with a European telecom conglomerate to acquire a 49 per cent stake in the company.

In its letter to the Prime Minister, S Tel says it totally accepts the new recommendations, which include a steep hike in the subscriber base criteria for spectrum allocation.

“S Tel commits to demonstrate the spectrum efficiency as per TEC’s recommendations by rolling out services in all the service areas in a period of six months … If we fail in any of the above commitments, S Tel is willing to surrender the spectrum allocated back to the DoT [Department of Telecommunications],” said the letter.

S Tel believes that its move to voluntarily pay an additional revenue share for “a national asset and a scare resource,” being allocated “at a hugely concessional rate,” will bring into effect a prioritisation model.

According to S Tel, this model will generate an additional revenue of Rs. 50,000 crore over the next ten years to the government.

“The suggested procedure is not an entry barrier like an upfront licence fee, but a formula that is related to revenue performance,” said the letter.

Asking the Prime Minister to intervene and ensure that the spectrum allocation policy is made fair and reasonable, S Tel promised that it would be willing to comply with any other “fair and equitable” method devised by the DoT to stratify the applications and prioritise spectrum allocation.

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