Telecom minister A. Raja with MTNL chairman R.S.P. Sinha at the launch of the MTNL Nova netPC in New Delhi on Monday. Picture by Prem Singh

New Delhi, Sept. 24: The government is planning fresh guidelines for the award of telecom licences, according to communications minister A. Raja.

“I have asked the DoT (department of telecommunications) secretary to form a committee to frame guidelines for grant of licence to new applicants,” said Raja.

The sector has witnessed a rush for licences, following a recent suggestion by the Telecom Regulatory Authority of India to lift the cap on the number of operators in a circle.

Raja said that a mere background check of promoters applying for a licence was inadequate.

The DoT also said that applications for unified access services licences would not be accepted after October 1, till the new guidelines are in place.

A company with a minimum paid-up capital of about Rs 140 crore and a net worth of over Rs 1,380 crore is eligible for a licence.

Officials said the move was not aimed at disqualifying any player. The purpose was to help the DoT in obtaining information such as the details of promoters, proposed foreign direct investment, funding patterns and the net worth of applicants.

Raja also said that the award of a licence could be linked to availability of spectrum. Present rules offer spectrum free of cost with a licence.

This will place a hurdle before companies such as Idea and Aircel who have licences but are unable to start operations because of a lack of spectrum.

The officials said the committee would study promoter details to ascertain whether existing operators were seeking licences through proxies.

Over the past couple of weeks, more than 160 applications have been filed for licences.

Though companies have provided basic information in their applications, the DoT will carry out a closer scrutiny to establish if any crossholdings exist.

Under existing norms, a telecom company cannot hold more than 10 per cent stake in a rival firm.

The Cellular Operators Association of India, a lobby of GSM players, has already written to the DoT for a scrutiny of applications.

The COAI feels many of the applicants could be fronts for big companies.