TRAI’s final recommendation: No refund of license fee

India’s telecom regulator the Telecom Regulatory Authority of India (TRAI) has refused to recommend any special consideration to telecom operators who wish to “surrender” their license and get their money back.

Under the terms and conditions given in the telecom license, there is no provision for refund of the initial payment of Rs 1658 crore paid at the time of getting the license.

The Government had asked the TRAI if it thought that any such provision or special consideration should be given to operators who now wish to exit their business. Many operators, such as Loop Telecom, have indicated that they don’t want to continue in the space and wish to get out of it.

More than half of the roughly 120 licenses issued in 2008 have not been fully commercialized by their recipients yet. Some, like Loop Telecom and Etisalat DB, have very few subscribers in their 2008-license areas. On top of it, their licenses have been cancelled by the Supreme Court, with instructions for them to rebid for the spectrum by June.

In its new ‘Exit Policy for various telecom licences’ released today, the TRAI has made no special provision for exit or refunds.

The Government made it clear that the telecom regulator, therefore, has not recommended any such special measures for those who wish to exit.

“Based on analysis of the comments received from stakeholders on the draft response paper and its own analysis, the Authority has finalised the following recommendations .. Presently there is no need for a separate Exit Policy for all types of licences and the entry fee paid by the licensees will continue to be non-refundable as per their license terms and conditions,” the Department of Telecom said, in response to TRAI’s recommendation.

In January, the TRAI had issued a pre-consultation paper on ‘Exit Policy for various telecom licences’ on 6th January 2012. At the time, some operators had requested to get their money back, as they have not been able to commercialize their licenses and build up a business.