Access Services (Terms and Conditions)

PART I

GENERAL CONDITIONS

1. Ownership of the Licensee Company

1.1 Foreign Direct Investment (FDI) up to 100% with 49% under automatic route, and beyond 49% through the foreign Investment Promotion Board (FIPB) route, subject to observance of licensing and security conditions by the licensee as well as investors, as notified by the Department of Telecommunications from time to time.

(i) Both, direct and indirect foreign investment in the licensee company shall be counted for the purpose of calculating total FDI.

(ii) The licensee company/Indian promoters/investment companies, including  their holding companies shall comply with relevant provisions of the extant FDI policy of the Government. While approving the investment proposals, FIPB may take into account security concerns.

(iii) FDI shall be subject to the laws of India and not the laws of the foreign country/countries.

1.2 The licensee shall declare compliance with license and security conditions and the Indian & foreign equity holdings (both direct and indirect) in the licensee company, and submit a compliance report regarding compliance with FDI norms and security conditions on the 1st day of January and 1st day of July, on a half yearly basis, to the licensor. This is to be certified by the licensee company’s company secretary or statutory auditor.

1.3 The merger of Indian companies may be permitted as long as competition is not compromised as defined in clause 1.4 (ii).

1.4 The licensee shall also ensure that:

(i) Any changes in shareholding shall be subject to all applicable statutory permissions.

(ii) No single company/legal person, either directly or through its associates, shall have substantial equity holding in more than one licensee company in the same service area for the following Access Services: Basic, Cellular and Unified Access Services. ‘Substantial equity’ herein will mean ‘an equity of 10% or more’. A promoter company/legal person cannot have stakes in more than one licensee company for the same service area.

Note: Clause 1.4(ii) shall not be applicable to Basic and Cellular licensees existing as on 11 November 2003, and in case one of them migrates to UASL, it shall not be necessary to surrender the other license. Further, Basic and Cellular licensees existing as on 11 November 2003 shall not be eligible for a new UASL in the same service area, either directly or through its associates. Further, any legal entity having substantial equity in existing Basic/Cellular licensees shall not be eligible for a new UASL.

(iii) Management control of the licensee company shall remain in Indian Hands.

1.5 Change in the name of the licensee company shall be permitted in accordance with the provisions of the Indian Companies Act, 1956.

1.6 The licensee shall have a minimum paid up equity capital of Rs. _____________ Crores.

1.7 The promoters of the licensee shall have a combined net-worth of Rs. _________ Crores, and the net-worth of only those promoters shall be counted who have, directly in their name, at least 10% equity stake in the total equity of the company. In case of acquiring any other UASL licence, the licensee shall also maintain the additional net-worth as prescribed for new UASL for that service area also.

1.8: There shall be the following conditions for sale of equity of the UAS licensee company:

(i) There shall be a lock-in period for sale of equity of a person whose share capital is 10% or more in the UAS licensee company, as on the effective date of UAS licence, and whose net-worth has been taken into consideration for determining the eligibility for grant of UAS license, till the completion of three years from the effective date of the UAS licence, or till fulfilment of all the roll-out obligations under clause 34, whichever is earlier.

(ii) The issuance of additional equity share capital by the UAS licensee company, by way of private placement/public issue, is permitted. However, such person (on whom the lock-in condition applies as per para (i) above) shall not transfer, in any manner, such as sale, assignment etc., his share capital, directly or indirectly, to any other person during the lock-in period i.e. the invested amount in the shareholding by the equity holder shall not be reduced, in any circumstances, during the lock-in period.

(iii) In case of issue of fresh equity within the lock-in period, the declaration of dividend and/or special dividend shall be barred.

(iv) The provision of the lock-in period shall not apply in pursuance of the enforcement of pledge by lending financial institutions/banks in the event of any default committed by the UAS licensee company.

2. Scope of the License

2.1 This license is granted to provide ‘services’, as defined in clause 2.2 of this license agreement, on a non-exclusive basis in the designated Service Area, and others can also be granted a license for the said Service in the same Service Area.

PROVIDED FURTHER that the licensor, on its own or through a designated operator, shall always have a right to operate the Service anywhere in India including the Service Area for which this licence is granted. Details of various service areas are enclosed as Annexure VI.

2.2 (a)

(i) The services cover collection, carriage, transmission and delivery of voice and/or non-voice messages over the licensee’s network in the designated service area, and includes the provision of all types of access services. An access service provider can also provide internet telephony, internet services and broadband services. If required, the access service provider can use the network of an NLD/ILD service licensee.

In addition to this, except those services listed in clause 2.2 (b)(i), the licensee cannot provide any service/services which require a separate licence. The access service includes, but is not limited to, wireline and/or wireless service, including full mobility and limited mobility as defined in clause 2.2 (c)(i), and fixed wireless access. However, the licensee shall be free to enter into an agreement with other service provider(s) in India or abroad for providing roaming facilities to its subscribers under full mobility service, unless advised/directed otherwise by the licensor. The licensee may offer “Home Zone Tariff Scheme(s)” as a subset of full mobile service in well defined geographical areas, through a tariff of its choice, within the scope of orders of TRAI on the subject. Numbering and interconnection for this service shall be same as that of full mobile subscribers.

Note: A licensee may enter into mutual commercial agreements for intra-service area roaming facilities with other licensed Cellular Mobile Telephone Service (CMTS) licensees/ Unified Access Service (UAS) licensees. Further, TRAI can also prescribe tariffs/charges for such facilities within the provisions of TRAI Act, 1997 as amended from time to time.

(ii) Leased circuit is defined as virtual private network (VPN) using circuit or packet switched (IP Protocol) technology, apart from point-to-point non-switched physical connections/transmission bandwidth. Public network is not to be connected with leased circuits/CUG’s.

(iii) Access service providers can provide broadband services, including triple play i.e voice, video and data.

2.2 (b)

(i) Further, the licensee can also provide voice mail, audiotex services, video conferencing, videotex, e-mail, closed user group (CUG), as ‘Value Added Services’ over its network, to the subscribers falling within its service area, on a non-discriminatory basis. The licensee cannot provide any service except as mentioned above, which otherwise shall require a separate licence. However, an intimation before providing any other value added service, which is mentioned above or listed in Item 74 of Annexure I, has to be sent to the licensor and TRAI.

(ii) No separate entry fee shall be charged for  voice mail, audiotex services, video conferencing, videotex, e-mail, closed user group (CUG) provided by the licensee under this license. However, all the revenue earned by the licensee through these services shall be counted towards the revenue for the purpose of paying license fee under the license agreement.

2.2 (c)

(i) In respect of a subscriber availing limited mobility facility, the mobility shall be restricted to the local area i.e. Short Distance Charging Area (SDCA) in which the subscriber is registered. While deploying such systems, the licensee has to follow the SDCA-based linked numbering plan in accordance with the National Numbering Plan of the respective SDCA within which the service is provided, and it should not be possible to authenticate and work with the subscriber terminal equipment in the SDCA’s other than the one in which it is registered. Terminal of such subscriber in the wireless access system can be registered in only one SDCA. Multiple registrations or temporary subscriber/subscription facilities in more than one SDCA, using the same subscriber terminal in wireless access systems is not permitted, and the same subscriber terminal cannot be used to avail of limited mobility facility in more than one SDCA. The system shall also be so engineered to ensure that the handover of a subscriber does not take place from one SDCA to another SDCA under any circumstances, including the handover of calls through call forwarding beyond the SDCA. The licensee must ensure that the mobility, in the case of such limited mobility service/facility, remains restricted to the SDCA.

(ii) The licensee, after migration to the UASL regime, will also offer limited mobility services to customers who so desire.

2.2 (d)

(i) The licensee is permitted to provide services by utilising any type of network equipment, including circuit and/or packet switches that meet the relevant standards of the International Telecommunication Union (ITU)/Telecommunication Engineering Centre (TEC)/international standardisation bodies such as 3GPP/3GPP2/ETSI/IETF/ANSI/EIA/TIA/IS

(ii) For provision of mobile services in areas falling near the international border of India, the condition specified in Clause 41.9 shall be applicable.

2.2 (e)

It is obligatory upon the licensee to provide the above stated services of good standard by establishing a state-of-the-art digital network.

2.3 The licensee shall be free to carry intra-service area long distance traffic without seeking an additional licence. However, subject to technical feasibility, the subscriber of the intra-service area long distance calls shall be given the choice to use the network of another service provider in the same service area, wherever possible. The licensee can also enter into mutual agreements with NLD operators for carriage of intra-circle long distance traffic.

2.4 The licensee can appoint any franchisee, not limited to cable service providers, for the provision of last mile linkages, including suitable rural exchanges to provide services. However, all responsibilities for ensuring compliance with the terms & conditions of the license shall vest with the licensee. The terms of the franchise agreement between the licensee and his franchisee shall be settled mutually by negotiation between the two parties involved.

2.5

(i) The mode of ownership of subscribers’ terminal equipment will be at the option of the subscriber.

(ii) Any dispute with regard to the provision of services shall be a matter only between the aggrieved party and the licensee, who shall duly notify this to all before providing the service, and in no case shall the licensor bear any liability or responsibility. The licensee shall keep the licensor indemnified from all claims, cost, charges or damages in the matter.

2.6 The licensee shall make its own arrangements for all infrastructure involved in providing the service and shall be solely responsible for installation, networking and operation of necessary equipment and systems, treatment of subscriber complaints, issue of bills to its subscribers, collection of revenue and attending to claims or damages arising out of its operations.

3. Duration of Licence

3.1 This license shall be valid for a period of  20 (twenty) years from the effective date, unless revoked earlier for reasons as specified elsewhere in this document.

4. Extension of Licence

4.1 The licensor may extend, if deemed expedient, the license period by 10 (ten) years at one time, upon request of the licensee, if made during the 19th year of the licence period, on terms mutually agreed to. The decision of the licensor shall be final in regard to the grant of extensions.

5. Modifications in the Terms and Conditions of Licence

5.1 The licensor reserves the right to modify, at any time, the terms and conditions of the license if, in the opinion of the licensor, it is necessary or expedient to do so in public interest, or in the interest of the security of the State, or for the proper conduct of telegraphs. The decision of the licensor shall be final and binding in this regard.

6. Restrictions on Transfer of License

6.1 The licensee shall not, without the prior written consent of the licensor as described below, either directly or indirectly, assign or transfer this license in any manner whatsoever, to a third party, or enter into any agreement to sub-licence and/or any partnership relating to any subject matter of the license to any third party, either in whole or in part, i.e. no sub-leasing/partnership/third-party interest shall be created.

PROVIDED that the licensee can always employ or appoint agents and employees for the provision of the service.

6.1A The licensor shall have the right to direct the licensee to warn, penalise or terminate the franchisee, agent or distributor agreement after considering any report of conduct or antecedents detrimental to the security of the nation. The decision of the licensor in this regard shall be final and binding, and in any case, the licensee shall bear all liability in the matter and keep the licensor indemnified from all claims, cost, charges or damages in this respect.

6.2 Intra-service area mergers and acquisitions, as well as transfer of licenses, may be allowed subject to there being not less than 3 (three) operators providing access services in a particular service area, to ensure healthy competition as per the guidelines issued on the subject from time to time.

6.3 Further, the licensee may transfer or assign the license agreement, with the prior written approval of the licensor, to be granted upon fulfilment of the following conditions, and if no compromise in competition occurs in the provisions of telecom services:

(i) When a transfer or assignment is requested, in accordance with the terms and conditions, upon fulfilment of the procedures of a tripartite agreement, if already executed, amongst the licensor, licensee and lenders; or

(ii) Whenever amalgamation or restructuring (i.e. a merger or demerger) is sanctioned and approved by the High Court or Tribunal as per the law in force, in accordance with the provisions, particularly Sections 391 to 394 of Companies Act, 1956; and

(iii) The transferee/assignee is fully eligible, in accordance with eligibility criteria contained in tender conditions or  any other document for the grant of fresh license in that area, and show its willingness, in writing, to comply with the terms and conditions of the license agreement, including past and future roll-out obligations; and

(iv) All past dues are fully paid till the date of transfer/assignment by the transferor company and its associate(s)/ sister concern(s)/ promoter(s), and thereafter, the transferee company undertakes to pay all future dues, inclusive of anything remaining unpaid by the outgoing company in the past period.

7. Provision of Service

7.1 The licensee shall be responsible for, and is authorized to own, install, test and commission all applicable systems for the provision of unified access services under this licence agreement.

8. Delivery of Service

8.1 The licensee shall commission the applicable systems within one year from the effective date of the licence. The date of the test certificate issued by the authorised testing party of the licensor, as specified from time to time, shall be reckoned as the date of commissioning the service, for the purpose of calculating liquidated damages in terms of Clause 35 of the licence agreement. However, the licensee may start providing services to customers at any time, without the need of any specific approval from the licensor.

Note: The amendment to the UAS license agreement for roll-out obligations, dated 10 February 2009, may be read along with Clause 8.

9. Requirement to furnish information

9.1 The licensee shall furnish to the licensor/TRAI, on demand, and in the manner and as per time frames, such documents, accounts, estimates, returns, reports or other information, in accordance with rules/orders as may be prescribed from time to time. The licensee shall also submit information to TRAI as per any order, direction or regulation issued from time to time under the provisions of the TRAI Act, 1997 or any amended or modified statute.

9.2 The licensee shall, in no case, permit service to any telecom service provider (including other service providers who do not require a licence under Section 4 of the Indian Telegraph Act, 1885) whose licence is either terminated, suspended or not in operation, at any point of time. Where connectivity already exists, the licensee shall be obliged to disconnect or severe connectivity immediately, without loss of time, upon receipt of any reference from the licensor in this regard. Disconnection shall be made effective within one hour of receipt of such reference.

10. Suspension, revocation or termination of the licence

10.1 The licensor reserves the right to suspend the operation of this license, in whole or in part, at any time, if, in the opinion of the licensor, it is necessary or expedient to do so in public interest, or in the interest of the security of the State, or for the proper conduct of telegraphs. The license fee payable to the licensor will not be required to be paid for the period for which the operation of this license remains suspended in whole. If the situation so warrants, it shall not be necessary for the licensor to issue a notice seeking comments of the licensee for this purpose, and the decision of the licensor shall be final and binding.

PROVIDED that the licensor shall not be responsible for any damage or loss caused or arisen out of the aforesaid action.

PROVIDED FURTHER that the suspension of the license will not be a cause or ground for extension of the license period, and the suspension period will be taken as period spent.

10.2

(i) The licensor may, without prejudice to any other remedy available for the breach of any license conditions, by a written notice of 60 (sixty) calender days from the date of issue of such notice to the licensee at its registered office, terminate this license under any of the following circumstances:

If the licensee:

a) fails to perform any obligation(s) under the license, including timely payments of fee and other charges due to the licensor;

b) fails to rectify, within the time prescribed, any defect/deficiency/correction in service/equipment as may be pointed out by the licensor.

c) goes into liquidation or ordered to be wound up.

d) is recommended by TRAI to terminate the license for non-compliance with the terms and conditions of the license.

e) fails to comply with the FDI norms.

(ii) The licensor may also impose a financial penalty, not exceeding Rs. 50 Crores, for violation of terms and conditions of the licence agreement This penalty is exclusive of liquidated damages as prescribed under Clause 35 of this licence agreement.

10.3 The licensee may surrender the license by giving notice of at least 60 (sixty) calender days in advance. In that case, it shall also notify all of its customers of the consequential withdrawal of services, by sending a 30 (thirty) calender days notice to each of them. The licensee shall pay all fees payable by it till the date on which the surrender of the license becomes effective. The effective date of surrender of licence will be 60 (sixty) calendar days counted from the date of receipt of such notice by the licensor.

10.4 It shall be the responsibility of the licensee to maintain the quality of service (QoS) even during the period when notice for surrender of the license is pending, and if the QoS is not maintained during this notice period, it shall be treated as a material breach, liable for termination at the risk and consequence of the licensee.

10.5 The licensor reserves the right to revoke the license at any time, in the interest of the public, by giving a notice of 60 (sixty) calender days from the date of issue of such notice.

10.6 The licensor reserves the right to take over the entire service, equipment and network of the licensee, or revoke/terminate/suspend the license in the interest of the public, or for national security, or in the event of national emergency/war, or low intensity conflict, or similar types of situations. Further, the licensor reserves the right to keep any area out of the operation zone of the service if implications of security so require.

10.7 Breach or non-fulfilment of the licence conditions may come to the notice of the licensor through complaints, or as a result of regular monitoring. Wherever considered appropriate, the licensor may conduct an inquiry, either suo moto or on a complaint, to determine whether there has been any breach in compliance of the terms and conditions of the license by the licensee, and upon such inquiry, the licensee shall extend all reasonable facilities and shall endeavour to remove the hindrance of every type.

10.8 It shall be the responsibility of the licensee to maintain the QoS, even during the period when the notice for surrender/termination of the license is pending, and if the QoS is not maintained during this notice period, it shall be liable to pay damages. The quantum of damages, and to whom it is payable, shall be determined by TRAI. The licensee shall also be liable to pay the licence fee till the end of the notice period, and more specifically, till the date on which the surrender/termination becomes effective.

11. Actions pursuant to termination of the licence

11.1 If under the licence agreement, a material event occurs, which entitles the licensor to terminate the licence agreement, the licensor shall proceed in accordance with the terms and conditions provided in the tripartite agreement, read with the licence agreement, wherever such agreement is executed and signed. In cases where no such agreement is signed, the action will be taken as per the clause given below.

11.2 On termination, surrender or expiry of the license, the bank guarantee shall be released to the licensee only after ensuring clearance of all dues that the licensee is liable to pay to the licensor. In case of failure of the licensee to pay the amounts due to the licensor, the outstanding amounts shall be realised through encashment of the bank guarantee, without prejudice to any other action(s) for recovery of the amounts due to the licensor, without any further communication to the licensee.

12. Force Majeure

12.1 If at any time during the continuance of this license, the performance, in whole or in part, by either party, of any obligation under this license, is prevented or delayed by reason of war, hostility, acts of the public enemy, civic commotion, sabotage, Acts of State, any direction from statutory authorities, explosion, epidemic, quarantine restrictions, strikes and lockouts (as are not limited to the establishments and facilities of the licensee), fire, floods, natural calamities or any act of god (hereinafter referred to as ‘event’), provided notice of the happening of any such event is given by the affected party to the other, within 21 Calendar days from the date of occurrence thereof, neither party shall, by reason of such event, be entitled to terminate the license, nor shall either party have any claims for damages against the other in respect of such non-performance or delay in performance.

PROVIDED that the service under the license shall be resumed as soon as practicable, after such event comes to an end or ceases to exist. The decision of the licensor as to whether the service may be resumed (and the time frame within which the service may be resumed) or not, shall be final and conclusive.

12.2 However, the force majeure events noted above will not, in any way, cause an extension in the license period.

12.3 While it will not normally be a ground for non-payment of licence fee, the liability for payment of licence fee for such inoperative period(s) due to the force majeure clause may be reduced/waived by the licensor, at its discretion, based on the circumstances of the event.

13. Set-Off Clause

13.1 In the event any sum of money or claim becomes recoverable from, or payable by the licensee to the licensor, either against this licence agreement, or otherwise in any manner, such money or claim can be (without restricting any right of set-off for counter-claim given or employed by law) deducted or adjusted against any amount or sum of money due then, or which, at any time thereafter, may become due to the licensee under this license agreement, or any other agreement, or contract between the licensor and the licensee.

13.2 The aforesaid sum of money payable to the licensee shall include any security which can be converted into money.

13.3 After exercising the right of set-off, a notice shall always be given immediately to the licensee by the licensor.

14. Way Leave

14.1 The licensee shall make its own arrangements for right of way (ROW). However, the central government may issue necessary notifications conferring the requisite powers upon the licensee for the purpose of placing telegraph lines, under Part III of the Indian Telegraph Act 1885.

PROVIDED that the non-availability of ROW, or a delay in getting permission/clearance from any agency shall not be construed or taken as a reason for non-fulfilment of its roll-out obligations, and shall not be taken as a valid excuse for not carrying out any obligations imposed by the terms of this license.

15. Publication of the Telephone Service Directory:

15.1 TRAI’s determination, with regard to publication of the telephone service directory containing information of subscribers of telecom services, shall be applicable and binding.

16. General

16.1 The licensee shall be bound by the terms and conditions of this license agreement, as well as by such orders/directions/regulations of TRAI, as per provisions of the TRAI Act, 1997 as amended from time to time, and instructions issued by the licensor/TRAI.

16.2 All disputes relating to this license will be subject to the jurisdiction of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) as per provisions of the TRAI Act, 1997, including any amendment or modification thereof.

16.3 The statutory provisions and rules made under the Indian Telegraph Act, 1885 or the Indian Wireless Telegraphy Act, 1933 shall govern this licence agreement. Any order passed under these statutes shall be binding on the licensee.

PART II

COMMERCIAL CONDITIONS

17. Tariffs

17.1 The licensee will charge tariffs for the service as per tariff orders/regulations/directions issued by TRAI from time to time. The licensee shall also fulfil requirements regarding the publication of tariffs, notifications and the provision of information as directed by TRAI through its orders/regulations/directions issued from time to time as per the provisions of the TRAI Act, 1997 as amended from time to time.

PART III

FINANCIAL CONDITIONS

18. Fees Payable

18.1 Entry Fee: A one-time non-refundable entry fee of Rs. ___________ Crore has been paid by the licensee prior to signing this licence agreement.

18.2 License Fee: A uniform annual licence fee rate of 8% of the ‘Adjusted Gross Revenue’ (AGR) shall be adopted across all categories of service areas (i.e. ‘Metro’, ‘A’, ‘B’ and ‘C’ categories) of the UAS licenses, in two steps, starting from 1 July 2012 as follows:

Category of UASL Annual Licence Fee rate as % ‘AGR’
  For period from 01.07.2012 to 31.03.2013 For year 2013-14 and onwards
Metro/Category ‘A’ 9% 8%
Category ‘B’ 8% 8%
Category ‘C’ 7% 8%

With effect from 1 July 2012, the annual licence fee and annual spectrum usage charges payable by each UAS licensee shall be on the actual AGR, subject to a minimum presumptive AGR, which shall be announced by the licensor every year separately, after considering the recommendations of the TRAI, which shall review the figure of the minimum presumptive AGR every year.

FURTHER, the above license fee shall be reduced to the extent of reduction in contribution towards the Universal Service Obligation Fund (USOF) levy if the licensee, in such service area(s), qualifies as per the table below, and subject to the note below the table:

USOF license fee

18.3 Radio Spectrum Charges

18.3.1 The licensee shall pay spectrum charges, in addition to the licence fee on a revenue-share basis, as notified separately from time to time by the Wireless Planning & Coordination Wing (WPC Wing). However, while calculating AGR for the limited purpose of levying spectrum charges based on revenue share, the revenue from wireline subscribers shall not be taken into account.

18.3.2 Further, royalty for the use of spectrum for point-to-point links and other access links shall be separately payable as per the details and prescription of the WPC Wing. The fee/royalty for the use of spectrum/possession of wireless telegraphy equipment depends upon various factors such as frequency, hop and link length, area of operation and other related aspects. The authorization of frequencies for setting up microwave links by licensed operators and the issuance of licenses shall be separately dealt with by the WPC Wing as per existing rules.

19. Definition of ‘Adjusted Gross Revenue’:

19.1 Gross Revenue: The gross revenue shall be inclusive of installation charges, late fees, sale proceeds of handsets (or any other terminal equipment etc.), revenue on account of interest, dividend, value added services, supplementary services, access or interconnection charges, roaming charges, revenue from permissible sharing of infrastructure and any other miscellaneous revenue, without any set-off for related items of expense etc.

19.2 For the purpose of arriving at the adjusted gross revenue (AGR), the following shall be excluded from the gross revenue to arrive at the AGR:

I. PSTN related call charges (access charges) actually paid to other eligible/entitled telecommunication service providers within India;

II. Roaming revenues actually passed on to other eligible/entitled telecommunication service providers; and

III. Service tax on the provision of services, and sales tax actually paid to the government, if gross revenue had been included as a component of the sales tax and service tax.

20. Schedule of payment of annual license fee and other dues

20.1 For the purpose of payment of the licence fee, the first year shall end on 31st March following the date of commencement of the licence agreement, and the licence fee for the first year shall be determined on a pro-rata basis for the actual duration of the “year”. From the second year onwards, the year shall be of 12 (twelve) English calendar months from 1st of April to the 31st of March for the payment of licence fee.

Explanation: The licence fee for the last quarter of the first year and last quarter of the last year of the licence will be computed with reference to the actual number of days, after excluding the other quarters, each being of three months.

20.2 Licence fee shall be payable in four quarterly instalments during each financial year (FY). Quarterly instalment of licence fees for the first three quarters of a financial year shall be paid within 15 (fifteen) days of the completion of the relevant quarter. This fee shall be paid by the licensee on the basis of actual revenue (on accrual basis) for the quarter, duly certified with an affidavit by a representative of the licensee, authorised by a board resolution, coupled with a general power of attorney. However, for the last quarter of the financial year, the licensee shall pay the licence fee by 25th March, on the basis of expected revenue for the quarter, subject to a minimum payment equal to the actual revenue share paid of the previous quarter.

20.3 The licensee shall adjust and pay the difference between the payment made and actual amount duly payable (on accrual basis) for the last quarter of the financial year within 15 (fifteen) days of the end of the quarter.

20.4 The quarterly payment shall be made together with a statement in the prescribed form as provided in Annexure II, showing the computation of revenue and licence fee payable. The aforesaid quarterly statements of each year shall be required to be audited by the auditors of the licensee (hereinafter called ‘licensee’s auditors’)  appointed under Section 224 of the Companies Act, 1956. The report of the auditor should be in the prescribed form as per Annexure II.

20.5 Any delay in the payment of licence fee payable, or any other dues payable under the license, beyond the stipulated period, will attract interest at a rate which will be 2% above the prime lending rate (PLR) of the State Bank of India existing as on the beginning of the financial year (namely 1st April) in respect of the licence fees pertaining to the said financial year. The interest shall be compounded monthly, and a part of the month shall be reckoned as a full month for the purposes of calculation of interest. A month shall be reckoned as an English calendar month.

20.6 Final adjustment of the licence fee for the year shall be based on the gross revenue figures, duly certified by the auditors of the licensee, in accordance with the provision of Companies’ Act, 1956.

20.7 A reconciliation between the figures appearing in the quarterly statements submitted in terms of Clause 20.4 of the agreement with those appearing in the annual accounts shall be submitted along with a copy of the published annual accounts, audit report and duly audited quarterly statements within 7 (seven) calender days of the date of signing the audit report. The annual financial account and the statement as prescribed above shall be prepared following the norms as prescribed in the Annexure.

20.8 In case the total amount paid as quarterly licence fee for the 4 (four) quarters of the financial year falls short by more than 10% of the payable licence fee, it shall attract a penalty of 50% of the entire amount of short payment. However, if such short payment is made good within 60 days from the last day of the financial year, no penalty shall be imposed. This amount of penalty shall be payable within 15 days from the date of signing the audit report on the annual accounts, failing which interest shall be further charged per terms of Condition 20.5.

20.9 The fee/royalty payable towards WPC Charges shall be payable at such time(s) and in such manner as the WPC Wing of the DoT may prescribe from time to time.

20.10 All sums becoming due and payable, as mentioned in this licence agreement, shall be paid by the licensee through a demand draft or pay order payable at New Delhi, drawn on any scheduled bank, in favour of the “Pay & Accounts Officer (HQ), DoT” or any other authority so designated by licensor.

20.11 The licensor, in order to ensure proper and correct verification of revenue share paid, can, if deemed necessary, modify, alter, substitute and amend whatever is stated in Clause 20.4, 20.7, 22.5 and 22.6 herein before and herein after written.

20.12 The licensee shall separately pay the access charges for carriage of calls originating in its network, but carried and terminated in the Other Service Providers’ networks. The licensee shall also separately pay charges for network resources obtained by the licensee from other licensed service providers. This will be governed by the determination of TRAI, if any.

21. Bank Guarantee

21.1 Performance Bank Guarantee: A performance bank guarantee (PBG) in the prescribed format shall be submitted for an amount equal to Rs. 20/10/2 Crores (for category ‘A’/‘B’/‘C’ service areas respectively) before signing the licence agreement.

FURTHER, on the completion of one year from the effective date of the licence, and after meeting the coverage criteria stipulated for the first year, the PBG shall be reduced to Rs. 10/5/1 Crores (for category `A’/`B’/`C’ service areas respectively) on self-certification provided by the licensee.

FURTHER, on fulfilling the roll out obligations as stipulated in Clause 34, the balance PBG shall be released on receipt of test certificate/ test certificates issued by TEC in respect of coverage.

21.2 Financial Bank Guarantee: The licensee shall submit a financial bank guarantee (FBG), valid for one year, from any scheduled bank or public financial institution duly authorized to issue such bank guarantee, in the prescribed performa annexed. Initially, the financial bank guarantee shall be for an amount of Rs. 50/25/5 Crore (for category ‘A’/‘B’/‘C’ service areas respectively) which shall be submitted before signing the licence agreement. Subsequently, the amount of FBG shall be equivalent to the estimated sum payable equivalent to the license fee for two quarters, and other dues not otherwise securitised, and any additional amount as deemed fit by the licensor. The amount of FBG shall be subject to periodic review by the licensor, and shall be renewed from time to time, till final clearance of all dues.

21.3 The fees, charges and royalties for the use of spectrum, and also for possession of any wireless telegraphy equipment, shall be separately securitised by furnishing a FBG of an amount equivalent to the estimated sum payable for two quarters (subject to such minimum levels as may be prescribed by the WPC/DoT from time to time) in the proforma annexed, to the WPC, valid for a period of one year, and renewable from time to time till final clearance of all such dues.

21.4 Initially, the bank guarantees shall be valid for a period of one year and shall be renewed from time to time. The licensee, on its own, shall extend the validity period of the bank guarantees for similar terms, at least one month prior to the date of its expiry, without any demand or notice from the licensor on a year-to-year basis. Any failure to do so, shall amount to a violation of the terms of the license and entitle the licensor to encash the bank guarantees and convert it into a cash security, without any reference to the licensee, at his risk and cost. No interest or compensation whatsoever shall be payable by the licensor on such encashment.

21.5 Without prejudice to its rights under any other remedy, the licensor may encash the bank guarantee (FBG as well as PBG), in case of any breach in the terms and conditions of the license by the licensee.

22. Preparation of Accounts

22.1 The licensee will draw, keep and furnish independent accounts for the service and shall fully comply with orders, directions or regulations as may be issued from time to time by the licensor or TRAI, as the case may be.

22.2 The licensee shall be obliged to:

a) Compile and maintain accounting records, sufficient to show and explain its transactions in respect of each completed quarter of the licence period, or of such lesser periods as the licensor may specify, fairly presenting the costs (including capital costs), revenue and financial position of the licensee’s business under the license, including a reasonable assessment of the assets employed in, and the liabilities attributable to, the licensee’s business, as well as for the quantification of revenue or any other purpose.

(b) Procure, in respect of each of those accounting statements prepared in respect of a completed financial year, a report by the licensee’s auditor, in the format prescribed by the licensor, stating inter alia whether, in his opinion, the statement is adequate for the purpose of this condition, and thereafter deliver to the licensor, a copy of each of the accounting statements, not later than three months at the end of the accounting period to which they relate.`

c) Send to the licensor, a certified statement sworn on an affidavit by an authorized representative of the company, containing a full account of the revenue, as defined in Clause 19, for each quarter separately, along with the payment for that quarter.

22.3

(a) The licensor or TRAI, as the case may be, shall have a right to call for, and the licensee shall be obliged to, supply and provide for an examination any books of accounts that the licensee may maintain in respect of the business carried on to provide the service(s) under this licence, at any time, without recording any reasons thereof.

(b) The licensee shall invariably preserve all billing and all other accounting records (electronic as well as hard copy) for a period of 3 (three) years from the date of publishing of duly audited and approved accounts of the company, and any dereliction thereof shall be treated as a material breach, independent of any other breach, sufficient to give a cause for cancellation of the license.

22.4 The records of the licensee will be subject to such scrutiny, as may be prescribed by the licensor, so as to facilitate independent verification of the amount due to the licensor as its share of the revenue.

22.5 The licensor may, on forming an opinion that the statements or accounts submitted are inaccurate or misleading, order an audit of the accounts of the licensee, by appointing an auditor at the cost of the licensee, and such auditor(s) shall have the same powers which the statutory auditors of the company enjoy under Section 227 of the Companies Act, 1956. The remuneration of the auditors, as fixed by the licensor, shall be borne by the licensee.

22.6 The licensor may also get conducted a ‘special audit’ of the licensee company’s accounts/records by ‘special auditors’, the payment for which, at a rate as fixed by the licensor, shall be borne by the licensee. This will be in the nature of auditing as described in Clause 22.5 above. The special auditors shall also be provided the same facility, and have the same powers as of the companies’ auditors as envisaged in the Companies Act, 1956.

22.7 The licensee shall be liable to prepare and furnish the company’s annual financial accounts according to the accounting principles prescribed, and the directions given by the licensor or the TRAI, as the case may be, from time to time.

PART IV

TECHNICAL CONDITIONS

23. Technical Conditions

23.1 The licensee shall provide the details of the technology proposed to be deployed for operation of the service. The technology should be based on standards issued by the ITU/TEC or any other international standards organisation/bodies/industry. Any digital technology having been used for a customer base of 1,000,000 (One Lakh) or more, for a continuous period of one year anywhere in the world, shall be permissible for use, regardless of its changed versions. A certificate from the manufacturers about satisfactory working for a customer base of 1,000,000 (One Lakh) or more over the period of one year, shall be treated as established technology.

23.2 Requisite monitoring facilities/equipment, for each type of system used, shall be provided by the licensee at its own cost for monitoring as and when required by the licensor.

23.3 The licensee shall ensure adherence to the national fundamental plan, which includes the national numbering, routing and transmission plans issued by the DoT, and technical standards as prescribed by the licensor or TRAI, from time to time. In case of providing a choice in long distance operators, the equipment shall support selection facilities such as dynamic call-by-call selection and pre-selection, as per prevailing regulations, directions, orders or determination issued by the licensor or TRAI on the subject.

23.4 The numbering plan for the unified access services will be as per the applicable national numbering plan. The licensor reserves the right to modify the national fundamental plan, or its part thereof, such as the numbering plan, routing plan, transmission plan etc.

23.5 The frequencies shall be assigned by the WPC from the designated bands prescribed in the national frequency allocation plan, 2002 (NFAP, 2002) as amended from time to time. Based on usage, justification and availability, spectrum may be considered for assignment, on a case-by-case basis. The frequencies assigned may not be contiguous, and may not be the same in all cases, while efforts would be made to make available larger chunks to the extent feasible. The detailed guidelines for allocation of frequency spectrum and charges thereof etc. would be separately issued from time to time.

23.6 The licensee may provide additional facilities in case of any value addition or upgradation, which the technology permits, at later date with prior intimation to the licensor and TRAI.

23.7 Use of 3G Spectrum: The licensee is also authorised to use the 3G spectrum block (as earmarked in the letter of intent) for the provision of telecom access services, as defined in the ‘scope of the license’ in the Schedule and Clause 2 of the UAS License agreement, from the date of award of the right to commercially use the 3G spectrum i.e. 1 September 2010, until the validity of the UAS licence agreement, or for a period of 20 (twenty) years from 1 September 2010, whichever is earlier, subject to compliance with the following conditions:

(i) Validity period for 3G Spectrum: The licensee is authorised to use this spectrum for a period of 20 (twenty) years from the date of award of the right to commercially use the allocated 3G spectrum block, i.e. 1 September 2010, for the operation of telecom access services, as defined in the ‘scope of the license’ in Clause 2 of Part 1 of the ‘General Conditions’ of the UAS license agreement, subject to the condition of validity of the UAS licence agreement. In case the UAS licence is cancelled/terminated/revoked/surrendered for any reason, the spectrum usage rights shall stand withdrawn forthwith. If the validity period of the UAS licence agreement expires before the expiry of the right to use the 3G spectrum for 20 (twenty) years awarded by means of the auction, then the validity of the UAS licence for operation of unified access services by using this 3G spectrum only, shall be extended to make it co-terminus with the validity of the right to use the 3G spectrum, without any charges, and in such manner as the licensor deems fit. The extension shall be done upon the application of the licensee, made 3 (three) months in advance of the expiry of the validity period of the UAS license. This does not include authorisation or extension of the period of validity of the UAS license for the provision of unified access services using wireline and/or spectrum allocated under Clause 43 of the UAS licence agreement.

(ii) Roll-out obligations for 3G spectrum: The licensee shall ensure compliance with the following network roll-out obligations with respect to 3G spectrum for the following categories of licensed service area(s):

(a) Applicable to the Metro service area licence(s): The licensee, to whom the 3G spectrum is assigned, shall be required to provide required street-level coverage, using the 3G spectrum, in at least 90% of the service area, within five years of the effective date.

(b) Applicable to Category A, B and C service area licence(s): The licensee, to whom the spectrum is assigned, shall ensure that at least 50% of the district headquarters (DHQ) in the service area is covered using the 3G spectrum, out of which at least 15% of the DHQ’s should be rural short distance charging areas (“SDCA’), within five years of the effective date. ‘SDCA’ is defined as per the definition used by the census of India. ‘Rural SDCA’ is defined as an area where 50% of the population lives in rural areas. FURTHER:

i) the operator shall be permitted to cover any other town in a district in lieu of the DHQ;

ii) coverage of a DHQ/town would mean that at least 90% of the area bounded by the municipal/local body limits should get the required street-level coverage:

iii) the DHQ shall be taken as on the effective date;

iv) the choice of DHQ’s/towns to be covered and for further expansion beyond 50% of DHQ’s/ towns shall lie with the operator.

The effective date shall be the date when the right to use the awarded spectrum commercially commences, i.e. 1 September 2010. If the licensee does not achieve its roll-out obligations, it shall be allowed a further period of one (1) year to do so, by making a payment of 2.5% of the successful bid amount (i.e. the spectrum acquisition price) per quarter, or part thereof, as liquidated damages. If the licensee does not complete its roll-out obligations even within the extended period of one year, the 3G spectrum assignment shall be withdrawn.

(iii) Licence Fee for 3G Spectrum: Over and above the license fees payable by the licensee as per Clause 18.2 of the UAS licence agreement, the licensee shall also pay the annual licence fee as a share of adjusted gross revenue (AGR) from the services using 3G spectrum, as per the rates mentioned in Clause 18.2 of the UAS licence agreement. All conditions contained in Part III (Financial Conditions) of the UAS licence agreement will continue to be applicable to the licensees, as amended by government from time to time.

(iv) Spectrum Usage Charges:

i) Notwithstanding anything contained in Clause 18.3 of Part III of the Schedule of this licence agreement, the spectrum charges, in accordance with the following tables, shall be payable by the licensee on the AGR, as defined in Clause 19 of Part III of the Schedule of this licence agreement:

Schedule A: Charges for GSM operators

Spectrum slab Annual spectrum charges (as a % of AGR)
Up to 4.4 MHz 03
Up to 6.2 MHz  04
Up to 8.2 MHz 05
Up to 10.2 MHz 06
Up to 12.2 MHz 07
Up to 15.2 MHz 08

Schedule B: Charges for CDMA operators

Spectrum slab Annual spectrum charges (as a % of AGR)
Up to 5 MHz 03
Up to 6.25 MHz 04
Up to 7.5 MHz 05
Up to 10 MHz 06
Up to 12.5 MHz 07
Up to 15 MHz 08

 

ii) It is made clear that while calculating the AGR, for the limited purpose of levying spectrum charges based on revenue share, the revenue from wireline subscribers shall not be taken into account.

(v) Merger of 3G spectrum blocks: Unless otherwise notified by the licensor in due course, if two or more licensees holding 3G spectrum blocks in a particular service area merge, then they shall be allowed to retain only one 3G spectrum block, and shall surrender the remaining 3G spectrum blocks in that service area.

(vi) Breach, revocation and surrender of 3G spectrum: The 3G spectrum assignment may be revoked, withdrawn, varied or surrendered in accordance with the applicable license conditions or any other applicable laws, rules, regulations or other statutory provisions. The 3G spectrum assignment may also be revoked if the licensor determines that the user of the spectrum is in serious breach of any of the conditions of the award of the spectrum (including adherence to the auction rules) and the consequent obligations. In case of less serious breaches, the licensor may impose penalties at its discretion. Seriousness of the breach shall be determined by the licensor at its sole discretion. The licensee may surrender the 3G spectrum by giving notice of at least 60 (sixty) calender days in advance. In that case, it shall also give notice to all of its customers, of the consequential withdrawal of services, by giving 30 (thirty) calender days’ notice to each of them. The licensee shall pay all fees payable by it until the date on which the surrender of the 3G spectrum becomes effective. The effective date of the surrender of spectrum shall be the later of the dates of expiry of the two notices mentioned in this clause. If at any stage, the spectrum allocation is revoked, withdrawn, varied or surrendered, no refund will be made.

(vii) Applicability of the Notice Inviting Applications (NIA) for 3G Spectrum: This amendment of the UAS licence agreement is subject to all the terms and conditions of the NIA for “Auction of 3G and BWA Spectrum” vide Notification No.P-110I4/13/2008-PP, dated 25 February 2010. The licensee shall comply with all the and conditions of the above mentioned NIA, unless and otherwise amended by the licensor, by way of an amendment of the UAS licence agreement, from time to time.

23.8 Use of BWA Spectrum: The licensee is also authorised to use the BWA spectrum block (as earmarked in the letter of intent) for the provision of telecom access services (as defined in the ‘scope of the license’, in Clause 2 of the UAS license agreement) from the date of the award of the right to commercially use the BWA spectrum (i.e. the date of issue of this amendment letter) till the validity of the UAS license agreement, or a period of 20 (twenty) years from the date of issue of this amendment letter, whichever is earlier, subject to compliance with the fallowing conditions:

(i) Validity period for BWA spectrum: The licensee is authorised to use this spectrum for a period of 20 (twenty) years from the date of the award of the right to commercially use the allocated BWA spectrum block (i.e. the date of issue of this amendment letter) for the operation of telecom access services (as defined in the ‘scope of the license’ in Clause 2, Part 1- ‘General Conditions’ of the UAS license agreement) subject to the condition of the validity of the UAS licence agreement. In case the UAS licence is cancelled/ terminated/revoked/surrendered for any reason, the spectrum usage rights shall stand withdrawn forthwith. If the validity period of the UAS licence agreement expires before the expiry of the right to use the BWA spectrum (for 20 years), awarded by means of the auction, then the validity of the UAS license for the operation of unified access services by using this BWA spectrum only, shall be extended to make it co-terminus with the validity of the right to use the BWA spectrum, without any charge, and in such manner as the licensor deems fit. The extension shall be done upon an application by the licensee which is made 3 (three) months in advance of the expiry of the validity period of the UAS license. This does not include authorisation or extension of the period of validity of the UAS license for the provision of unified access services using wireline, and/or spectrum allocated under Clause 43 of the UAS license agreement.

(ii) Roll-out obligations for BWA spectrum: The licensee shall ensure compliance with the following network roll-out obligations for BWA spectrum for the following categories of licensed service area(s):

(a) Metro service area licence(s): The licensee shall be required to provide the required street-level coverage using BWA spectrum, in at least 90% of the service area, within 5 (five) years from the effective date of the license.

(b) Category A, B and C service area licence(s): The licensee shall ensure that at least 50% of the rural SDCA’s are covered, within 5 (five) years from the effective date, using the BWA spectrum. Coverage of a rural SDCA would mean that at least 90% of the area bounded by the municipal/local body limits should get the required street-level coverage. The effective date of the license shall be the date no which the right to use the awarded spectrum commercially commences (i.e. the date of issue of this amendment letter). If the licensee does not achieve its roll-out obligations, its BWA spectrum assignment shall be withdrawn.

(iii) Licence fee for BWA spectrum: Over and above the licence fee payable by the licensee as per Clause 18.2 of the UAS license agreement, the licensee shall also pay the annual license fee as share of the adjusted gross revenue (AGR) from services using the BWA spectrum, as per rates mentioned in Clause 18.2 of the UAS license agreement. All conditions contained in Part III ‘Financial Conditions’ of the UAS license agreement will continue to be applicable to the licensees, as amended by government from time to time.

(iv) Spectrum usage charges for BWA spectrum:

i) Over and above the ‘radio spectrum charge’, payable by the licensee as per Clause 18.3 of the UAS license agreement, the licensee shall also pay 1% of the AGR from services using BWA spectrum as ‘annual spectrum charges’ payable quarterly in advance.

ii) The revenue from BWA services shall be reported separately in Appendix II to Annexure II – Format of Revenue and License Fee, as amended.

(v) Merger of BWA spectrum blocks: Unless otherwise notified by the licensor in due course, if two or more licensees holding BWA spectrum blocks in a service area merge, then they shall be allowed to retain only one BWA spectrum block, and shall surrender the remaining BWA spectrum blocks in that service area.

(vi) Breach, revocation and surrender for BWA spectrum: The BWA spectrum assignment may be revoked, withdrawn, varied or surrendered in accordance with applicable license conditions, or any other applicable laws, rules, regulations or other statutory provisions. The BWA spectrum assignment may also be revoked if the licensor determines that the user of the spectrum is in serious breach of any of the conditions of the award of the spectrum (including adherence to the auction rules) and its consequent obligations. In case of less serious breaches, the licensor may impose penalties at its discretion. The seriousness of the breach shall be determined by the licensor at its sole discretion. The licensee may surrender the BWA spectrum, by giving notice of at least 60 (sixty) calender days in advance. In that case, it shall also notify all of its customers of the consequential withdrawal of services by giving 30 (thirty) calender days’ notice to each of them. The licensee shall pay all fees payable by it until the date on which the surrender of the BWA spectrum becomes effective. The effective date of the surrender of spectrum shall be the later of the dates of expiry of the two notices mentioned in this clause. If at any stage, the spectrum allocation is revoked, withdrawn, varied or surrendered, no refund will be made.

(vii) Applicability of the notice inviting applications (NIA) for BWA spectrum: This amendment to the UAS license agreement is subject to all the terms and conditions of the NIA for “Auction of 3G and BWA Spectrum” vide Notification No. P-11014/13/2008-PP dated 25 February 2010. The licensee shall comply with all the terms & conditions of the NIA, unless and otherwise amended by the licensor by way of an amendment to the UAS license agreement from time to time.

Addendum: The total spectrum held by the licensee shall not exceed 25% of the spectrum assigned, by way of auction or otherwise, in the concerned service area, or spectrum cap of 50% in a band for access services. The spectrum assigned in GSM/CDMA/3G/BWA band shall be counted for this purpose.

24. The Applicable System

24.1 In the process of operating the Services, the licensee shall be responsible for:

(i) The installation of sites, excluding the installation of equipment at the subscriber’s premises, which will be left to the option of the subscriber;

(ii) the proper upkeep and maintenance of equipment;

(iii) maintaining the criteria of performance;

(iv) maintaining the quality of standards as per Clause 28.

25. Engineering Details

(a) The licensee shall furnish to the licensor, or its authorised representative(s), in such manner and at such times as may be required, complete technical details (with calculations for engineering, planning, dimensions of the system/network, relevant literature, drawings and installation materials) regarding the applicable system.

(b) The licensee shall supply all tools, test instruments and other accessories to the testing party of the licensor and/or the Telecom Engineering Centre (TEC) for conducting tests, if it so desires, prior to commissioning the service, or at any time during the currency of the license.

(c) Any delay on the part of the licensee in offering the system for conducting performance tests to the TEC/licensor will not be considered as a valid reason for non-fulfilment of the roll-out obligations imposed by the terms of this license.

(d) The licensee, before providing IPTV services, will give a self-certified declaration in the specified format to the licensor, the Ministry of Information and Broadcasting and TRAI, giving details of the license number and service area under which IPTV service is proposed to be provided/started, the start date, areas being covered, details of network infrastructure etc.

26. Network Interconnection

26.1 Interconnection between the networks of different service providers shall be as per the national standards of CCS No.7, issued from time to time by the Telecom Engineering Centre (TEC), subject to technical feasibility and integrity of the networks, and shall be within the overall framework of interconnection regulations issued by TRAI from time to time. However, if a situation so arises, interconnection with R2MF signalling may be permitted by the licensor.

26.2 The licensee may enter into suitable arrangements with other service providers to negotiate interconnection agreements, whereby the interconnected networks will provide the following:

(a) To meet all reasonable demands for the transmission and reception of messages between the interconnected systems;

(b) To establish and maintain one or more points of interconnect as are reasonably required, and of sufficient capacity, and in sufficient numbers, to enable transmission and reception of the messages by means of the applicable systems;

(c) To connect, and keep connected, the networks to their applicable systems.

26.3 The provision and installation of any equipment, for the purpose of interconnection, shall depend on mutual agreement between the concerned parties.

26.4 The interconnection tests for each and every interface with any service provider shall be carried out by mutual arrangement between the licensee and the other party involved. The interconnection tests schedule shall be mutually agreed to. Adequate time, not less than 30 (thirty) days, will be given by the licensee for these tests. On successful completion of the interconnection tests, or on mutual agreement between service providers for rectification of deficiencies/deviations, if any, the licensee can commence the service. In case of disagreement in the rectification of deficiencies/deviations in interconnection tests that have been conducted, the prior approval of the licensor shall be required.

26.5 It shall be mandatory for the licensee to provide interconnection to all eligible telecom service providers, as well as national long distance (NLD) operators, whereby subscribers could have a free choice to make inter-circle/international long distance calls through NLD/ILD operators. For international long distance calls, the licensee shall normally access the international long distance (ILD) operator’s network through the NLD operator’s network, subject to the fulfilment of any guidelines/orders/directions/regulations issued from time to time by the licensor/TRAI. The licensee shall not refuse to interconnect with the ILD service licensee directly in situations where the ILD gateway switches/point-of-presence and the access provider’s GMSC/transit switch/media gateway controller/media gateway, are located at the same station of Level I TAX.

26.6 Direct interconnectivity among all telecom service providers in the licensed service area is permitted. The licensee shall interconnect with other service providers, subject to compliance with prevailing regulations, directions or determinations issued by TRAI. The interconnection shall have to be withdrawn in the case of termination of the respective licensed networks of another telecom service provider, within one hour, or within such time as directed by the licensor in writing, after receiving intimation from the licensor in this regard.

26.7 The point of interconnection (POI) between the networks shall be governed by guidelines/orders/directions/regulations issued from time to time by the licensor/TRAI.

26.8 The licensee will work out suitable regular interconnect billing arrangements with other licensed service providers, in their respective interconnect agreements with them.

27 Interface

27.1 The licensee shall operate and maintain the licensed network conforming to the quality of service standards (QoS) to be mutually agreed on in respect of network-network interface, subject to such other directions as the licensor or TRAI may give from time to time. Failure on the part of the licensee, or his franchisee, to adhere to the QoS stipulations by TRAI, and the network-to-network interface standards of the Telecom Engineering Centre (TEC) may be treated as a breach of the license terms. For the purpose of providing the service, the licensee shall install his own equipment so as to be compatible with other service providers’ equipment to which the licensee’s applicable systems are intended for interconnection. The licensee shall be solely responsible for attending to claims and damages arising out of its operations.

27.2 The charges for accessing other networks for inter-network calls shall be based on mutual agreement between the service providers, conforming to orders/regulations/guidelines issued by TRAI from time to time.

27.3 The network resources, including the cost of upgrading/modifying interconnected networks to meet the service requirements of the licensee, will be mutually negotiated by keeping in view the orders and regulations issued by TRAI from time to time.

28 Quality of Performance

28.1 The licensee shall ensure the quality of service (QoS) as prescribed by the licensor or TRAI. The licensee shall adhere to such QoS standards, and provide timely information, as required therein.

28.2 The licensee shall be responsible for:

i) Maintaining the performance and QoS standards.

ii) Maintaining the mean time to restore (MTTR) within the specified limits of the QoS.

iii) The licensee will keep a record of the number of faults and rectification reports in respect of the service, which will be produced before the licensor/TRAI as and when, and in whatever form, desired.

28.3 The licensee shall be responsive to complaints lodged by its subscribers. The licensee shall rectify the anomalies within the MTTR specified, maintain the history sheets for each installation, and the statistics and analysis of the overall maintenance status.

28.4 The licensor or TRAI may carry out performance tests on the licensee’s network and also evaluate quality of service (QoS) parameters in the licensee’s network prior to the grant of permission for commercial launch of the service, after successful completion of interconnection tests and/or at any time during the currency of the licence, to ascertain that the network meets the specified QoS standards. The licensee shall provide ingress and other support including instruments, equipment etc., for such tests.

28.5 The licensee shall enforce and ensure QoS, as prescribed by the licensor/TRAI, from the infrastructure provider(s) with whom it may enter into agreements/contracts for leasing/ hiring/buying or any such instrument for the provision of infrastructure or bandwidth. The responsibility of ensuring QoS shall be that of the licensee.

29. Emergency and Public Utility Services

29.1 The licensee shall provide independently, or through mutually agreed upon commercial arrangements with other service providers, all public utility services including toll-free services such as police, fire, ambulance, railways/road/air accident enquiry, police control, disaster management etc. While providing emergency services such as police, fire, ambulance etc. it shall be ensured that such calls originated shall be delivered to the control room of the concerned authority for the area from where the call originated.

PART V

OPERATING CONDITIONS

30. Customer Service

30.1 The licensee shall register the demand/request for a telephone connection from any applicant, without any discrimination, at any place in the licensed service area, and provide the service, unless otherwise directed by the licensor. The licensee shall not, in any manner, discriminate between subscribers and provide service on the same commercial principle and shall be required to maintain a transparent, open-to-inspection waiting list. The licensee shall clearly define the scope of service to the subscriber(s) at the time of entering into a contract with such subscriber(s). The licensor shall have right to impose a suitable penalty, not limited to a financial penalty, apart from any other actions, for breach of this condition. The licensee shall launch the service on a commercial basis only after commencement of registration in the manner prescribed. Before commencement of services in an area, the licensee shall notify and publicise the address where any subscriber can register a demand /request for telephone connection. Any change in this address shall be duly notified by the licensee.

PROVIDED that nothing contained herein will affect or prejudice the rights of the licensee to carry out a check on the credit worthiness of its prospective subscribers.

30.2 The licensee shall widely publicise the provision of services and shall not refuse registration of demand in the licensed service area. In case the provision of telephone connection to an applicant is not feasible for technical or other reasons beyond the control of the licensee, then the licensee shall endeavour to make arrangements for the provision of connections in such cases within a reasonable time.

30.3 The licensee shall ensure continuity of services to its customers, unless the license is terminated or suspended by the licensor for any reason whatsoever.

30.4 It shall be the responsibility of the licensee to issue, or cause to be issued, bills to its subscribers for use of the service. The licensee shall maintain such records so as to produce itemised billing information. The billing system of the licensee shall be able to generate billing information, in adequate detail, to ensure satisfaction to the customer about the genuineness of the bill. The directions of TRAI, from time to time, in this regard shall apply.

30.5 The licensee shall offer a regular itemised billing service (for long distance calls) to its customers, wherever applicable. In every case, the licensee shall be responsible to its customers and shall ensure fulfilment of the obligations in this regard. The licensee shall also maintain necessary records for the billing cycles, as specified by the licensor or TRAI from time to time.

30.6 All complaints of customers in this regard will be addressed/handled as per guidelines, orders, regulations or directives issued by the licensor or TRAI from time to time.

30.7 The licensee’s contractual obligations (to various telecom service providers, including other service providers (OSP’s) not requiring a licence under Section 4 of the Indian Telegraph Act, 1885) will include terms and conditions under which the service may be obtained, utilised and terminated.

30.8 The licensee shall notify in writing, all arrangements with respect to repair, fault rectification, compensation or refunds. All complaints in this regard will be addressed/handled as per guidelines, orders, regulations or directions issued by the licensor or TRAI from time to time.

30.9 Any dispute with regard to the provision of services shall be a matter only between the aggrieved party and the licensee, who shall duly notify this to all before providing the service. And in no case shall the licensor bear any liability or responsibility in the matter. The licensee shall keep the licensor indemnified for all claims, cost, charges or damages in the matter.

30.10

(a) A telecom licensee, while providing TV channels through IPTV, shall transmit only such broadcast satellite television channels, in exactly same form (unaltered), which are registered with, or are otherwise permitted by, the Ministry of Information and Broadcasting. In such cases, the responsibility to ensure that content is in accordance with the extant laws, rules, regulations etc. shall be that of the broadcaster, and the telecom licensee will not be held responsible. The IPTV service provider shall not carry any broadcast satellite television channels which are prohibited either permanently or temporarily, or not registered with the Ministry of Information & Broadcasting.

(b) The telecom licensee, while providing TV services, can obtain content from a multi system operator (MSO) or a cable operator for providing IPTV services.

(c) Telecom licensees providing IPTV will show only those news and current affairs television channels that have been registered with Ministry of Information and Broadcasting. They will not produce or provide any other broadcast or non-broadcast channel having any element of news and current affairs.

(d) The provisions of the ‘programme code’ and ‘advertisement code’ as provided in the Cable Television Network (Regulation) Act, 1995 and rules thereunder, shall be applicable even in the case of content other than TV channels from the broadcast provided by the telecom IPTV service provider. Since it is the telecom licensee who will be providing this content, the telecom licensee shall be responsible for ensuring compliance with the codes with respect to such content. In addition to this, such licensees will also be bound by various acts, instructions, directions and guidelines issued by the central government, from time to time, to regulate the content.

(e) If the content is being sourced from content providers other than the licensee, then it will be the responsibility of the licensee to ensure that their agreements with such content providers contain appropriate clauses to ensure prior compliance with the programme and advertisement codes and other relevant Indian laws, civil and criminal, regarding content.

(f) The central government in the Ministry of Information and Broadcasting shall have the right to notify the number and names of channels of Prasar Bharati, or any other channel, for compulsory carriage by the IPTV service provider in its service, and the manner of reception and retransmission of such channels.

(g) The telecom licensee, while providing IPTV services, should provide commercial interoperability so that if the subscribers decide to switch over to any other service provider or platform, they should be able to do so at least cost. Commercial interoperability here would mean that in addition to offering the receiver-set on an outright purchase basis, a subscriber should also have the option to purchase it on a hire-purchase or rental basis, with a provision to return the receiver-set on such terms and conditions as may be laid down by regulations issued by TRAI.

30.11 The licensee shall facilitate timely implementation of mobile number portability (MNP) service in the licensed service area as per the regulations/orders made, or directions issued by TRAI under the TRAI Act, 1997, or any instructions issued by the licensor from time to time.

31. The Subscriber Terminals (Fixed, Mobile Telephone or Handset)

31.1 The licensee shall have the right to undertake the sale, hire-purchase, lease or renting of the subscriber/mobile terminals. Proper usage of terminals at the subscriber’s premises shall be as per agreement between the licensee and subscriber.

31.2 The licensee shall be responsible to ensure that the subscriber terminal is operated in accordance with the terms of the license and the WPC licence. The SIM card in the user terminal is non-transferable.

31.3 The subscriber terminals employed in the network shall be of a type/model certified by an internationally accredited agency with respect to ITU/ETSI/TEC/international standardisation bodies such as 3GPP/3GPP-2/ETSI/IETF/ANSI/EIA/TIA/IS, or any other international standard as may be approved by the government. Only such category of subscriber units, as has been granted a certificate, shall be brought into and operated within India under this agreement.

31.4 A subscriber will be free to obtain the subscriber terminal at his option from any source, subject to Clause 31.3 above.

32. Obligations Imposed on the Licensee

32.1 The provisions of the Indian Telegraph Act 1885, the Indian Wireless Telegraphy Act 1933, and the Telecom Regulatory Authority of India Act, 1997, as modified from time to time, or any other statute on their replacement, shall govern this license.

32.2 The licensee shall furnish all necessary means and facilities as required for the application of Section 5(2) of the Indian Telegraph Act, 1885, whenever occasion so demands. Nothing provided and contained anywhere in this licence agreement shall be deemed to affect adversely anything provided or laid under the provisions of the Indian Telegraph Act, 1885 or any other law on the subject in force.

33. Sharing of infrastructure between unified access service providers and any other telecom service provider in their area of operation

The sharing of infrastructure by the licensee is permitted as follows:

(i) Sharing of ‘passive’ infrastructure i.e. buildings, towers, dark fibre etc. is permitted.

(ii) Provision of point-to-point bandwidth, from their own infrastructure within its service area to other licensed telecom service providers for their own use (resale is not permitted) is also permitted.

(iii) Sharing of switches by licensees for providing other licensed services is permitted.

33A.

(i) The government in the Ministry of Information and Broadcasting may direct the licensee providing IPTV service to ensure the preservation and retention, for a period of 90 (ninety) days, unless specified otherwise, of different kinds of content made available to its subscribers and requires it to ensure its security, and also that it is not tampered with during such period. The licensee providing IPTV service may be required to produce the same to the government or its authorised representative, as and when required, and the licensee providing IPTV service will be required to ensure compliance with all such directions.

(ii)The licensee providing IPTV service shall provide necessary facilities for continuous monitoring of the IPTV network, at its own cost, and maintain recordings of programmes and advertisements carried on the network for a period of 90 (ninety) days unless specified otherwise, from the date of broadcast, and produce the same to the government or its authorised representative(s), as and when required. The monitoring system must provide set-top-box subscriber information as well as content, to the law enforcement agency in plain readable, audible and viewable format, as the case may be.

PROVIDED that in case of any dispute, the records of broadcast of programmes and advertisements shall be maintained till final disposal of the dispute.

PROVIDED FURTHER that the IPTV service provider shall provide access to the government or its authorised representative, of all its facilities, including equipment, records, systems etc. for the purpose of inspection.

(iii) On demand by the government in the Ministry of Information and Broadcasting, or its authorised representative, the licensee providing the IPTV service shall provide the necessary equipment, services and facilities at designated place(s) for continuous monitoring of the IPTV service, by or under supervision of, the government or its authorised representative.

(iv) The licensee providing the IPTV service shall submit such information with respect to its service as may be required by the Government in the Ministry of Information and Broadcasting or its authorized representative from time to time.

(v) The licensee providing the IPTV service shall furnish any such information at periodic intervals as may be required by the Government in the Ministry of Information and Broadcasting, or its authorised representative, concerning programme content and quality, technical parameters etc. relating to the service, in the format as may be required by the government or its authorised representative from time to time.

(vi) The licensee providing the IPTV service shall furnish complete details, such as the name, technical details and license etc. of the value added service being provided through the IPTV network.

PROVIDED that in case any new value added service is added to the network, the licensee providing the IPTV service shall obtain the prior approval of the government or licensing authority. The government or the licensing authority may, from time to time, prescribe or prohibit certain value added services.

(vii) Any breach of the provisions of acts/licenses/registrations/permissions by the licensee/cable operator/broadcasters, shall be dealt with by designated agencies, which are responsible for administering such acts/licenses/registrations/permissions.

(viii) The government shall have the right to modify, at any time, the provisions of these guidelines and/or the terms and conditions of permission/registration, if in the opinion of the government, it is necessary or expedient to do so in public interest, or in the interest of the security of the state. The decision of the government shall be final and binding in this regard.

(ix) The decision of the Ministry of Information & Broadcasting with respect to any violation of prevailing acts/rules/guidelines pertaining to their administrative jurisdiction, in respect of content carried on IPTV services, shall be final. The quantum of penalties for such a violation will be decided by the licensor in consultation with respective ministries/departments.

34. Roll-Out Obligations

34.1 The licensee shall be solely responsible for the installation, networking and operation of necessary equipment and systems for the provision of services, treatment of subscriber complaints, issuance of bills to its subscribers, collection of its component of revenue, attending to claims and damages arising out of his operations.

34.2

(a) Applicable to  Category A, B and C service area licence(s): The licensee shall ensure that:

(i) At least 10% of the district headquarters (DHQ’s) will be covered in the first year, and 50% of the DHQ’s will be covered within three years from the effective date of licence.

(ii) The licensee shall also be permitted to cover any other town in a district in lieu of the DHQ’s.

(iii) Coverage of a DHQ/town would mean that at least 90% of the area bounded by the municipal limits should get the required street-level and in-building coverage.

(iv) The DHQ’s shall be taken as on the effective date of the license.

(v) The choice of DHQ’s/towns to be covered, and further expansion beyond 50% DHQ’s/towns shall lie with the licensee, depending on their business decision.

(vi) There is no requirement for mandatory coverage of rural areas.

(b) Applicable to Metro Service Area licence(s): The licensee shall be required to provide, in 90% of the service area, street-level as well as in-building coverage, within one year of the effective date.

(The amendment to the unified access service (UAS) license agreement for roll-out obligations dated 10 Feb 2009 may be read along with Clause 34)

35. Liquidated Damages

35.1 The time period for the provision of services stipulated in this license shall be deemed as the essence of the contract, and the service must be brought into commission not later than such specified time period. No extension in the prescribed due date will be granted. If the service is brought into commission after the expiry of the due date for commissioning, without prior written concurrence of the licensor, and is accepted, such commissioning will entail recovery of liquidated damages (LD) under this clause.

PROVIDED FURTHER that if the commissioning of service is effected within 15 (fifteen) calender days of the expiry of the due date for commissioning of service, then the licensor shall accept the services without levy of and liquidate damages charges.

35.2 In case the licensee fails to bring the service, or any part thereof, into commission (i.e., fails to deliver the service, or to meet the required coverage criteria/network roll-out obligations) within the period prescribed for the commissioning of service, the licensor shall be entitled to recover liquidated damages charges at Rs. 5,00,000 (Rupees Five Lakhs) per week for the first 13 (thirteen) weeks; at Rs 10,00,000 (Rupees Ten Lakhs) for the next 13 (thirteen) weeks and thereafter at Rs. 20,00,000 Lakhs (Rupees Twenty Lakhs) for the next 26 (twenty six) weeks subject to a maximum of Rs. 7,00,00,0000 (Rupees Seven Crores). Part of the week is to be considered as a full week for the purpose of calculating the liquidate damages charges. For a delay of more than 52 (fifty-two) weeks, the license may be terminated under the terms and conditions of the license agreement. The week shall mean 7 (seven) calender days (from midnight) from Monday to Sunday; both days are inclusive, and any extra day shall be counted as a full week for the purpose of recovering liquidated damages.

(The amendment to the unified access service (UAS) license agreement for roll-out obligations dated 10 February 2009 may be read along with Clause 35)

36. Inspection and Testing of Installations

36.1 The licensor/TRAI may also carry out all performance tests required for checking of quality of service (QoS), if it so desires. The licensee shall supply all necessary literature, drawings etc. regarding the equipment installed and shall also supply all tools, test instruments and other accessories to the testing party of the licensor/TRAI for conducting the tests. The list of performance tests will be furnished by the licensee one month prior to the date of commissioning to the licensor. In case the licensor chooses to conduct performance tests, and some deficiency is found therein by the licensor, the delay caused for the rectification of deficiencies, if any, will be entirely on account of the licensee.

36.2 The acceptance testing for each and every interface with BSNL/MTNL/other service provider may be carried out by mutual arrangement between the licensee and the other party involved. The interconnection test schedule shall be mutually agreed.

PART VI

SECURITY CONDITIONS

37. Right to Inspect

37.1 The licensor or its authorised representative, or the Ministry of Information & Broadcasting (for IPTV service) or its authorised representative, shall have the right to inspect the sites used for extending the service, and in particular, but not limited to, the right to have access to leased lines, junctions, terminating interfaces, hardware/software, memories of semiconductors, magnetic and optical varieties, wired or wireless options, distribution frames and conduct the performance test, including to enter into dialogue with the system through input/output devices or terminals. The licensee will provide necessary facilities for continuous monitoring of the system, as required by the licensor or its authorised representative(s). The inspection will ordinarily be carried out after reasonable notice, except in circumstances where giving such a notice will defeat the very purpose of the inspection.

37.2 Wherever considered appropriate, the licensor or the Ministry of Information & Broadcasting (for IPTV service) may conduct any inquiry, either suo moto or on a complaint, to determine whether there has been any breach in complying with the terms and conditions of the license, by the licensee, and upon such inquiry, the licensee shall extend all reasonable facilities without any hindrance.

38. Location of Switches

38.1 The licensee, on request, shall provide to the licensor, the location details of switching centres, transmission centres, including routing details etc.

38.2 In areas which are sensitive from a security point of view, as may be notified from time to time by the licensor, implementation of any equipment installation, and execution of projects, shall be taken up only after the licensor’s approval.

39. Confidentiality of Information

39.1 The licensee shall not employ bulk encryption equipment in its network. Any encryption equipment connected to the licensee’s network, for specific requirements, has to have prior evaluation and approval of the licensor or officer specially designated for this purpose. However, the licensee shall have the responsibility to ensure protection of privacy of communications and to ensure that unauthorised interception of messages does not take place.

39.2 Subject to conditions contained in these terms and conditions, the licensee shall take all necessary steps to safeguard the privacy and confidentiality of any information about a third party and its business, to whom it provides the service, and from whom it has acquired such information by virtue of the service provided, and shall use its best endeavours to secure that:

a) No person acting on behalf of the licensee, or the licensee, divulges or uses any such information, except as may be necessary in the course of providing such services to the third party; and

b) No such person seeks information other than is necessary for the purpose of providing services to the third party.

PROVIDED the above para shall not apply where:

a) The information relates to a specific party, and that party has consented in writing to such information being divulged or used, and such information is divulged or used in accordance with the terms of that consent; or

b) The information is already open to the public and otherwise known.

39.3 The licensee shall take necessary steps to ensure that the licensee, and any person(s) acting on its behalf, observe confidentiality of customer information.

39.4 The licensee shall, prior to commencement of the service, confirm in writing to the licensor that the licensee has taken all necessary steps to ensure that it, and its employees, shall observe confidentiality of customer information.

40. Prohibition of Certain Activities by the Licensee

40.1 The licensee shall not engage, on the strength of this license, in the provision of any other service requiring a separate license, as defined in this license agreement.

40.2 To remove any doubt, it is hereby clarified that nothing contained in the paragraph above shall preclude the licensee from engaging in advertising and promotional activities relating to any of the applicable systems.

40.3 The licensee shall take necessary measures to prevent objectionable, obscene, unauthorised or any other content, messages or communications infringing copyright, intellectual property etc., in any form, from being carried on its network, consistent with the established laws of the country. Once specific instances of such infringement are reported to the licensee by the enforcement agencies, the licensee shall ensure that the carriage of such material on its network is prevented immediately.

40.4 The licensee is obliged to provide, without any delay, all tracing facilities to trace nuisance, obnoxious or malicious calls, messages or communications transported through its equipment and network, to the authorised officers of the government of India, including police, customs, excise, intelligence department officers etc., when such information is required for investigation or detection of crimes, and in the interest of national security. Any damages arising on account of licensee’s failure in this regard shall be payable by the licensee.

40.5 In case any confidential information is divulged to the licensee for proper implementation of the agreement, it shall be binding on the licensee, and its employees and servants, to maintain its secrecy and confidentiality.

41. Security Conditions

41.1 The licensee shall provide necessary facilities, depending upon the specific situation, at the relevant time to the government, to counteract espionage, subversive acts, sabotage or any other unlawful activity.

41.2 The licensee shall make available, on demand, to the person authorised by the licensor, full access to the switching centres, transmission centres, routes etc. for technical scrutiny and inspection, which can be visual inspection or an operational inspection.

41.3 All foreign personnel likely to be deployed by the licensee for installation, operation and maintenance of the licensee’s network shall be security cleared by the Government of India, prior to their deployment. The security clearance will be obtained from the Ministry of Home Affairs, Government of India, who will follow the standard drill in the matter.

41.4 The licensee shall ensure protection of privacy of communications and ensure that unauthorised interception of messages does not take place.

41.5 The licensor reserves the right to modify these conditions, or incorporate new conditions considered necessary in the interest of national security and public interest, or for the proper provision of telegraphs.

41.6 The licensee will ensure that telecommunications installations carried out by it should not become a safety hazard and is not in contravention of any statute, rule or regulation and public policy.

41.6A

i) The licensee shall be completely and totally responsible for security of its networks. It shall have an organisational policy on security and security management of its networks. Network forensics, network hardening, network penetration test, risk assessment, actions to fix problems and to prevent such problems from reoccurring etc. should be part of the policy, and it should take all measures in respect of these activities. It should submit its policy to the licensor within 30 (thirty) working days from the date of this amendment, for record.

ii) In furtherance of the organisational security policy, the licensees shall audit its network or get the network audited, from a security point of view, once a year from a network audit and certification agency. The first audit of the network should be completed within 12 (twelve) months of the issuance of this amendment, and thereafter once in a financial year. A list of some of the agencies which might carry out the network audit from security point of view will be on the website of the DoT. The list is purely for information dissemination as a facilitating measure, and telecom service providers are free to engage the service of any other agency for this purpose, which is certified to carry out the audit as per ISO 15408 and ISO 27001 standards, because network security is its responsibility.

iii) The licensee shall induct only those network elements into its telecom network which have been tested as per relevant contemporary Indian or international security standards, for example IT and IT related elements against ISO/IEC 15408 standards; information security management systems against ISO 27000 series standards; telecom and telecom related elements against 3GPP, 3GPP2 security standards etc. from any international agency/lab of the standards e.g. common criteria labs in case of ISO/IEC 15408 standards until 31 March 2013. From 1 April 2013, the certification shall be done only from authorised and certified agencies/labs in India. The copies of test results and test certificates shall be kept by the licensee for a period of 10 (ten) years from the date of procurement of the equipment.

iv) The licensee shall include all contemporary security related features and features related to communication security, as prescribed under relevant security standards, while procuring the equipment, and implement all such contemporary features into the network. A list of features, equipment, software etc. procured and implemented shall be kept by the licensee till they are in use, which may be subjected to inspection and testing by the licensor at any time, in the network or otherwise, at the option of the licensor.

v) The licensee shall employ only resident, trained Indian nationals as Chief Technical Officer/s, Chief Information Security Officer/s and nodal executives for the handling of interception and monitoring cases, and in-charge of the gateway mobile switching centre (GMSC), mobile switching centre (MSC), soft switch, central database and as system administrator/s.

vi) The licensee shall:

a. Ensure that all the documentation, including software details are obtained from manufacturers/vendors/suppliers in the English language.

b. Keep a record of operation and maintenance procedures in the form of a manual.

c. Keep a record of all the operation and maintenance command logs for a period of 12 (twelve) months, which should include the actual commands given, who gave the command, when was it given, with the date and time and from where. For the next 24 (twenty four) months, the same information shall be stored/retained in a non-online mode. For this purpose, the licensee shall keep a list of user ID’s linked with the name and other details of the user, duly certified by the system administrator. The user list shall be provided to the licensor, or agencies designated by the licensor, as and when required.

d. Keep a record of all software updates and changes. The major updates and changes should also be informed to the licensor within 15 (fifteen) days of completing such updates and changes.

e. Keep a record of the supply chain of products (hardware/software). This should be taken from the manufacturer/vendor/supplier at the time of procurement of the products.

f. Comply with the conditions of remote access (RA).

vii) The licensee shall create facilities for monitoring all intrusions, attacks and frauds and report the same to the licensor and to CERT-IN. Such facilities shall be created by the licensee within 12 (twelve) months of the issuance of this amendment, and shall be reported to the licensor as and when created during this period.

viii) The licensee, through suitable agreement clauses with the vendor, shall ensure that the vendor/supplier allows the telecom service provider, licensor/DoT and/or its designated agencies to inspect the hardware, software, design, development, manufacturing facilities and supply chains, and subject all software to a security/threat check any time during the supply of equipment. The number of such visits will be limited to two in a purchase order. The expenditure for such visits, for an order valuing more than Rs. 50,00,00,000 (Rupees 50 Crores) up to 40 man-days per visit shall be borne by the licensee directly or through vendor.

ix)

a. A penalty of up to Rs. 50,00,00,000 (Rupees 50 Crores) will be levied for any security breach, which has been caused due to inadvertent inadequacy/inadequacies in precaution on the part of the licensee prescribed under this amendment. The licensor shall constitute a five members committee, which shall include two cybersecurity experts, to determine whether the breach is due to inadvertent inadequacy/inadequacies or otherwise. The committee shall also decide the amount of penalty depending upon the loss, gravity of breach etc.

b. In case of inadequate measures prescribed under this amendment, or act of intentional omissions, or deliberate vulnerability left in the equipment or in case of deliberate attempt at a security breach, the penalty amount will be Rs. 50,00,00,000 (Rupees 50 Crores) per breach. The same breach in the same equipment purchased through the same purchase order or in the same lot, or the same negligence at the same time at multiple locations in an operator’s network, will be considered as a single breach for the purpose of levying penalties under this clause. The licensee shall deposit the penalty amount with the licensor within 30 (thirty) days of the issue of notice.

c. Besides the penalty, liability and criminal proceedings under relevant provisions of various acts such as the Indian Telegraph Act, Information Technology Act, Indian Penal Code (IPC), Criminal Procedure Code (CrPC) etc. can be initiated. In such cases, the license of the licensee can also be cancelled, or the vendor or supplier who supplied the hardware/software that caused the security breach could be blacklisted from doing business in the country, or both. The licensee must include the clause on the licensor’s discretion to blacklist the vendor or supplier, in such cases, in the agreement signed with the vendors/suppliers.

x) Location Details:

a. The licensee shall provide location details of mobile customers in the license service area as per the below mentioned time frame from the date of issue of this amendment and accuracy. It should be a part of CDR in the form of longitude and latitude, besides the co-ordinate of the cell sites, which is already one of the mandated fields of CDR.

Accuracy in Percentage
Distance in Meters Urban (More than 1 million mobiles in a municipal limit) Sub-Urban & Rule Remote
1 year 2 years 1 year* 2 years 3 years 2 years 3 years
50 30 50
100 60 75 50 60  -
300 80 95 50 60 70 50 60
500 60 70 80 60 70

* Applicable to the state of J&K, Assam and the North-East region

b. To start with these details will be provided for specified mobile numbers. However, within a period of 3 years location details shall be part of CDR for all mobile calls.]

41.7 In the interests of security, suitable monitoring equipment, as may be prescribed for each type of system used, will be provided by the licensee for monitoring as and when required by the licensor. The specific orders or directions from the government, issued under such conditions, shall be applicable.

41.8 The precise delineation of geographical borders taken by the licensee for the purpose of defining service areas across international borders, if any, shall have prior approval of the Government of India. The terrestrial boundaries of India shall be as depicted in the maps issued by the Survey of India.

41.9

(i) The licensee shall ensure that the base stations, cell sites or radio transmitters, as the case may be, to provide mobile telephone services near the international borders of India, wherever located and established, shall be as far away from such border as feasible and such base stations, cell sites or radio transmitters shall work in such a fashion that radio signal(s), emanating therefrom, fade out when nearing, or about to cross, international borders and become unusable within a reasonable distance across such border. For this purpose, suitable technical infrastructure shall be installed by the licensee.

(ii) Notwithstanding anything contained in Clause 41.9(i), in the areas falling within 10 (ten) kilometres of the line of control (LOC), line of actual control (LAC) and the international border between Akhnoor in Jammu & Kashmir and Pathankot, and other areas as may be notified from time to time by the licensor, the installation of base stations, cell sites, radio transmitters or any concerned equipment, and the execution of the concerned project by the licensee shall be taken up only after obtaining prior approval from the local Army authorities about the specific location of the BTS, with prior intimation to the licensor and the concerned TERM Cell in addition to requisite clearances. The licensor, its authorised representative(s), as well as Army authorities shall have the power to inspect such BTS(s), and the licensee shall facilitate inspection of the BTS as per requisition from such authorities. During emergency, if so desired by the licensor and/or the Army, the licensee shall shut down such BTS(s) under intimation to the licensor/concerned TERM Cell. The order for shutting down such BTS(s) by the Army must be signed by at least the Commanding Officer of the local Army unit.

(iii) Periodic surprise checks may be carried out by the licensor, or its authorised representative(s)/Army and/or security agencies, in order to ensure compliance with the above conditions by licensee(s). In case any violation is detected, stern action shall be taken according to the terms and conditions of the license agreement, including imposition of financial penalty.

41.10 The designated person of the central/state government, as conveyed by the licensor from time to time, in addition to the licensor or its nominee, shall have the right to monitor the telecommunications traffic in every mobile switching centre (MSC)/exchange/media gateway controller (MGC)/media gateway (MG) or any other technically feasible point in the network set up by the licensee. The licensee should make arrangements for the monitoring of simultaneous calls by government security agencies. The hardware at the licensee’s end, and software required for monitoring of calls, shall be engineered, provided/installed and maintained by the licensee at the licensee’s cost. However, the respective government instrumentalities shall bear the cost of use-end hardware and leased line circuits from the MSC/exchange/MGC/MG to the monitoring centres, to be located as per their choice, in their premises or in the premises of the licensee.

But in the case of a centralised monitoring system (CMS), the licensee shall provide connectivity up to the nearest point-of-presence of the multi-protocol label switching (MPLS) network of the CMS, as its own cost, in the form of dark optical fibre with redundancy. If dark optical fibre connectivity is not readily available, the connectivity on the optical fibre network media may be extended in the form of 10 Mbps bandwidth, upgradable up to 45 Mbps or higher as conveyed by the government, till such time the dark optical fibre connectivity is established. However, the licensee shall endeavour to establish connectivity by optical fibre at the earliest. From the point of presence of the MPLS network of the CMS, onward traffic will be handled by the government at its own cost.

In case the security agencies intend to locate the equipment at the licensee’s premises to facilitate monitoring, the licensee should extend all support in this regard, including space and entry of the authorised security personnel. The interface requirements, as well as features and facilities as defined by the licensor, should be implemented by the licensee for both data and speech. Presently, the licensee should ensure suitable redundancy in the complete chain of Monitoring equipment for trouble free operations of monitoring of at least 210 simultaneous calls for seven security agencies.

Presently, the licensee should ensure suitable redundancy in the complete chain of monitoring equipment for trouble-free operations of monitoring of at least 480 simultaneous calls as per requirements, with at least 30 simultaneous calls for each of the designated security/law enforcement agencies. Each mobile switching centre (MSC) of the licensee in the service area shall have the capacity to provision at least 3000 numbers for monitoring. Presently there are 10 (ten) designated security/law enforcement agencies. The above capacity provisions and no. of designated security/law enforcement agencies may be amended by the licensor separately, by issuing instructions at any time.

Along with the monitored call following records should be made available:

(i) Called/calling party mobile/PSTN numbers.

(ii) Time/date and duration of the interception.

(iii) Location of target subscribers. For the present, cellular identification should be provided for the location of the target subscriber. However, the licensor may issue directions from time to time on the precision of location, based on technological developments and integration of global positioning systems (GPS) which shall be binding on the licensee.

(iv) Telephone numbers, if any call-forwarding feature has been invoked by target subscribers.

(v) Data records for even failed call attempts.

(vi) Call data record (CDR’s) of roaming subscribers.

The licensee shall be required to provide the CDR’s of all specified calls, which are handled by the system at specified periodicity, as and when required by the security agencies.

41.11 The government, through appropriate notification, may debar usage of mobile terminals in certain areas in the country. The licensee shall deny services in areas specified by designated authorities immediately, and in any case within 6 (six) hours on request. The licensee shall also provide the facility to carry out surveillance of mobile terminal activity within a specified area.

41.12 The licensee shall not employ bulk encryption in its network. Any encryption equipment connected to the licensee’s network for specific requirements has to have prior evaluation by, and the approval of, the licensor or any officer specially designated for this purpose. The licensee shall be responsible for ensuring the privacy of communications on its network, and also to ensure that unauthorised interception of message does not take place.

41.13 The licensor shall have the right to take over the service, equipment and networks of the licensee (either in part or in the whole service area) in case any directions are issued in the public interest by the government of India, in the event of a national emergency/war or low intensity conflict or any other eventuality. Any specific orders or directions from the government of India issued under such conditions shall be applicable to the licensee and shall be strictly complied with.

41.14 A complete list of subscribers shall be made available by the licensee on its website (having password-controlled access), so that authorised intelligence agencies are able to obtain the subscriber list, at any time, as per their convenience, with the help of the password. The list should be updated on a regular basis. A hard copy, as and when required by security agencies, shall also be furnished. The licensee shall ensure adequate verification of each and every customer before enrolling him/her as a subscriber; instructions issued by the licensor in this regard from time to time shall be scrupulously followed. The SIM card used in the user terminal or hand-held subscriber terminal (where SIM card is not used) shall be registered against each subscriber for his/her bona fide use. The licensee shall make it clear to the subscriber that the SIM card used in the user terminal registered against him is non-transferable, and that he alone will be responsible for the proper and bona fide personal use of the service.

41.15 A format will be prescribed by the licensor to delineate the details and information required before enrolling a customer as a subscriber. Photo identification of subscribers shall be a pre-requisite for providing the service.

41.16 The licensor or its representative(s) will have access to a database relating to the subscribers of the licensee. The licensee shall also update the list of its subscribers and make it available to the licensor at such intervals as may be prescribed. The licensee shall make available to the licensor or its authorised representative, at any prescribed instant, details of the subscribers using the service.

41.17 The licensee shall maintain all commercial records with regard to the communications exchanged on the network. Such records shall be archived for at least 1 (one) year for the scrutiny of the licensor for security reasons, and may be destroyed thereafter unless directed otherwise by the licensor.

41.18 Calling line identification (CLI) shall be provided. The network should also support malicious call identification and CAMA.

41.19 The licensee shall ensure/implement the following:

(i) Utmost vigilance should be exercised in providing bulk telephone connections for a single user as well as for a single location. The provision of 10 (ten) or more connections may be taken as bulk connections for this purpose. Special verification of bona fide should be carried out before providing such bulk connections. Information about bulk connections shall be forwarded to the respective TERM Cell of the DoT, DDG (Security) of the DoT and any other officer authorised by the licensor from time to time, as well as all security agencies, on a monthly basis.

(ii) The call detail records (CDR’s) for outgoing calls made by customers should be analysed for subscribers making a large number of outgoing calls day and night, and to various telephone numbers. Normally, no incoming call is observed in such cases. This can be done by running a special program for this purpose. The service provider should devise an appropriate fraud management and prevention programme and fix threshold levels of average per-day usage in minutes of the telephone connection; all telephone connections crossing the threshold of usage should be checked for bona fide use. A record of the checks must be maintained, which may be verified by the licensor at any time. The list/details of suspected subscribers should be informed to the respective TERM Cell of the DoT, DDG (Security) of the DoT and any other officer authorised by Licensor from time to time .

(iii) Active support must be extended by service providers to the respective TERM Cell of the DoT for the detection of such clandestine/illegal telecommunications facilities. For this purpose, the names of the nodal officers and alternate nodal officers in respect of each licensed service area as communicated to intelligence agencies for the monitoring of telecommunications should also be forwarded to the respective TERM Cell of the DoT, DDG (Security) of the DoT and the Access Services Cell of the DoT. The TERM Cell of the DoT will contact the nodal officer/alternate nodal officer, and till the time such nomination is received, or in case of non-availability of such officer, the TERM Cell will contact the Chief Executive Officer of the licensee, for such support/ coordination.

(iv) Calling Line Identification (CLI) shall never be tampered with as it is also required for security purposes, and any violation of this amounts to a breach of security. CLI restriction (CLIR) should not be normally provided to customers. Due verification of the reason for demanding the CLIR must be done before providing the facility. It shall be the responsibility of the service provider to work out appropriate guidelines to be followed by its staff members to prevent misuse of this facility. Subscribers having CLIR facility should be listed in a password-protected website with their complete address and details so that authorised government agencies can view or download the data for detection and investigation of misuse. However, CLIR must not be provided in case of bulk connections, call centres, telemarketing services.

(v) Bulk users’ premises should be inspected by service providers at regular intervals to satisfy themselves about the bona fide use of such facilities. A record of such inspection should be maintained and preserved for a minimum of 1 (one) year, for inspection/verification by the licensing authority or a designated officer of the authority.

(vi) Leased circuits should also be checked for their bona fide use and to detect any misuse.

41.20 The licensee shall also ensure compliance with the following conditions:

(i) The Chief Officer in-charge of technical network operations and the Chief Security Officer should be resident Indian citizens.

(ii) Details of the infrastructure/network diagram (technical details of the network) could be provided on a need-basis only to telecom equipment suppliers/manufacturers and the affiliate/parents of the licensee company. Clearance from the licensor (Department of Telecommunications, Government of India) would be required if such information is to be provided to anybody else.

(iii) For security reasons, domestic traffic of such entities as may be identified/specified by the licensor shall not be hauled/routed to any place outside India.

(iv) The licensee company shall take adequate and timely measures to ensure that the information transacted through a network by subscribers is secure and protected.

(v) The officers/officials of the licensee companies dealing with lawful interception of messages will be resident Indian citizens.

(vi) The majority directors on the board of the licensee company shall be Indian citizens.

(vii) The positions of the Chairman, Managing Director, Chief Executive Officer (CEO) and/or Chief Financial Officer (CFO), if held by foreign nationals, would require to be security vetted by the Ministry of Home Affairs (MHA). Security vetting shall be required periodically on yearly basis. In case something adverse is found during the security vetting, the direction of the MHA shall be binding on the licensee.

(viii) The licensee shall not transfer the following to any person/place outside India:

(a) Any accounting information relating to subscriber (except for international roaming/billing)

Note: It does not restrict a statutorily required disclosure of financial nature; and

(b) User information (except pertaining to foreign subscribers using an Indian operator’s network while roaming).

(ix) The licensee must provide traceable identity of it subscribers. However, in the case of providing services to roaming subscribers of foreign companies, the Indian Company shall endeavour to obtain traceable identities of roaming subscribers from the foreign company as a part of its roaming agreement.

(x) On request of the licensor, or any other agency authorised by the licensor, the licensee shall be able to provide the geographical location of any subscriber (BTS location) at a given point of time.

(xi) Remote access (RA) to the network would be provided only to approved location(s) abroad through approved location(s) in India. The approval for location(s) would be given by the licensor (DoT) in consultation with security agencies.

(xii) Under no circumstances should any remote access to suppliers/manufacturers and affiliate(s) be enabled to access lawful interception systems (LIS), lawful interception monitoring (LIM), call contents of traffic and any such sensitive sector/data, which the licensor may notify from time to time.

(xiii) The licensee company is not allowed to use remote access facility for monitoring of content.

(xiv) Suitable technical devices should be made available at the Indian end to designated security agency/licensor in which a mirror image of the remote access information is available online for monitoring purposes.

(xv) A complete audit trail of the remote access activities pertaining to the network operated in India should be maintained for a period of 6 (six) months and provided on request to the licensor, or any other agency authorised by the licensor.

(xvi) The licensee shall ensure that necessary provision (hardware/software) is available in its equipment for lawful interception and monitoring from a centralised location.

(xvii) The licensee shall familiarise/train TERM Cells/security agency officers/officials in respect of relevant operations/ features of its systems.

(xviii) It shall be open to the licensor to restrict the licensee company from operating in any sensitive area from a national security angle.

(xix) In order to maintain the privacy of voice and data, monitoring shall be in accordance with rules in this regard under the Indian Telegraph Act, 1885.

(xx) For monitoring of traffic, the licensee company shall provide access to its network and other facilities, as well as to its books of accounts, to the security agencies.

(xxi) The remote access (RA) to the network would be provided only to approved location(s) abroad, through approved location(s) in India. The approval for location(s) would be given by the licensor (DoT) after satisfying itself about the appropriateness.

42. Application of Indian Telegraph Act.

42.1 The licensee shall adopt all means, and facilitate in every manner, the application of the Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act, 1933, as modified or replaced from time to time. The services shall be provided in accordance with the provisions of the Indian Telegraph Rules, as modified and amended from time to time.

42.2 As per the provision of Section 5 of the Indian Telegraph Act, the licensee will provide necessary facilities to the designated authorities of the central/state government, as conveyed by the licensor from time to time, for the interception of messages passing through its network.

Section 5 (2) of the Indian Telegraph Act, 1885 reads as under:

On the occurrence of any public emergency, or in the interest of public safety, the Central Government or a State Government, or any officer specially authorised on their behalf by the Central Government or a State Government, may, if satisfied that it is necessary or expedient to do so in the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign states or public order, or for preventing incitement to the commission of an offence for class or messages to or from any person or class of persons, or relating to any particular subject, brought for transmission by or transmitted or received by any telegraph, shall not be transmitted or shall be intercepted or detained or shall be disclosed to the Government making the order or an officer thereof mentioned on the order:

PROVIDED that press messages intended to be published in India of correspondents accredited to the Central Government or a State Government shall not be intercepted or detained, unless their transmission has been prohibited under this subsection.”

PART VII

FREQUENCY AUTHORISATION

43. Frequency Authorisation

43.1 A separate specific authorisation and license (hereinafter called the ‘WPC licence’) shall be required from the Wireless Planning and Coordination (‘WPC’) wing of the Department of Telecommunications, Ministry of Communications & Information Technology, permitting the utilisation of appropriate frequencies/bands for the establishment, possession and operation of wireless elements of the telecom service, under the license agreement for unified access service, under specified terms and conditions, including the payment for and the WPC license. Such grant of authorisation and the WPC licence will be governed by normal rules, procedures and guidelines, and will be subject to the completion of necessary formalities therein.

43.2 For this purpose, a separate application shall be made to the “Wireless Advisor to the Government of India, WPC Wing, Department of Telecommunications, Ministry of Communications, Sanchar Bhawan, New Delhi-110 001” in the prescribed application form available from the WPC wing.

43.3 Site clearance, in respect of fixed stations and its antenna mast, shall be obtained from the WPC wing, for which the applicant shall separately apply to the Secretary, Standing Advisory Committee on Frequency Allocations (SACFA) of the WPC Wing in the prescribed application form, to the following address: The Secretary (SACFA), WPC Wing, Ministry of Communications, Department of Telecommunications, Sanchar Bhawan, New Delhi-110 001.

Explanation: SACFA is the apex body in the Ministry of Communications & Information Technology for considering matters regarding the coordination for frequency allocations and other related issues/matters. (Site clearance refers to the agreement of major wireless users for the location of proposed fixed antennae, from the point of view of compatibility with other radio systems and aviation hazards. It requires inter-departmental coordination and is an involved process). Normally the clearance procedure may take two to six months, depending on the nature of the installations and the height of the antennae/masts.

43.4 For establishing various point-to-point radio links, the frequency bands earmarked for various agencies has been indicated in the National Frequency Allocation Plan (‘NFAP 2002′) as amended from time to time. Mere indication of the band does not guarantee availability of the frequency spectrum, which has to be coordinated on a case-to-case basis.

43.5 Subject to availability, and as per guidelines issued from time to time, the spectrum allocation and frequency bands will be as follows :

(i) For wireless operations in the subscriber access network, the frequencies shall be assigned by the WPC wing from the frequency bands earmarked in the applicable National Frequency Allocation Plan, and in coordination with various users. Initially, a cumulative maximum of up to 4.4 MHz + 4.4 MHz shall be allocated in the case of TDMA based systems at 200 KHz per carrier, or 30 KHz per carrier; or a maximum of 2.5 MHz + 2.5 MHz shall be allocated in the case of CDMA based systems at 1.25 MHz per carrier, on a case-by-case basis, subject to availability. While efforts would be made to make available larger chunks, to the extent feasible, the frequencies assigned may not be contiguous and may not be the same in all cases, or within the whole service area. For making available appropriate frequency spectrum for the roll-out of services under the license, the type(s) of systems to be deployed are to be indicated.

(ii) Additional spectrum beyond the above stipulation may also be considered for allocation after ensuring optimal and efficient utilisation of the already allocated spectrum, taking into account all types of traffic and guidelines/criteria prescribed from time to time. However, spectrum not more than 5 + 5 MHz in respect of CDMA systems, or 6.2 + 6.2 MHz in respect of TDMA based systems, shall be allocated to any new unified access services licensee. The spectrum shall be allocated in 824-844 MHz paired with 869–889 MHz; 890–915 MHz paired with 935–960 MHz; 1710–1785 MHz paired with 1805–1880 MHz.

(iii) In the event a dedicated carrier for micro-cellular architecture based system is assigned in 1880–1900 MHz band, spectrum of not more than 3.75 + 3.75 MHz in respect of CDMA systems; or 4.4 + 4.4 MHz in respect of TDMA systems, shall be assigned to any new unified access service licensee.

(iv) The licensor has the right to modify and/or amend the procedure for allocation of spectrum, including the quantum of spectrum, at any point of time, without assigning any reason.

43.6 The licensee shall not cause, or allow to be caused, harmful interference to other authorised users of radio spectrum. For the elimination of harmful interference to other users, the licensee shall abide by all instructions and orders issued by the government.

43.6A. The licensee shall conduct audits and provide self certificates after every two years, as per the procedure prescribed by the Telecommunication Engineering Centre (TEC)/or any other agency authorised by the licensor from time to time, for conforming to limits/levels for antennae (base station emissions) for general public exposure as prescribed by the International Commission on Non-Ionizing Radiation Protection (ICNIRP) from time to time. The present limits/levels are reproduced as detailed below:

Frequency Range E-Field Strength        ( Volt/Meter (V/m)) H-Field Strength (Amp/Meter (A/m)) Power Density (Watt/Sq.Meter (W/Sq.m))
400MHz to 2000MHz 0.434f ½ 0.0011f ½ f/2000
2GHz to 300GHz 19.29 0.05 1

 

(f = frequency in MHz)

Note: The last date of submission of self-certificates is 31 March 2013. For a BTS which is newly installed or upgraded during the two year cycle, the self-certificate shall continue to be submitted to the respective TERM Cell as per existing instructions.

Note 2: The TEC has issued a revised ‘Test Procedure for measurement of EMF from BTS” No. TEC/TP/EMF/001 dated 2 October 2012. Further, TEC has issued an amendment on 26 December 2012 in relation to this test procedure, copies of which are available at http://www.tec.gov.in/Test%20Procedure%20for%20EMF.php

43.7 The licensor/WPC/TRAI shall have the right to inspect, from time to time, the installations from technical angles, to check its conformity with the licence authorising spectrum uses.

43.8 In case of provisioning of bandwidth by the licensee through satellite media, the licensee shall abide by the prevalent government orders, regulations or directions on the subject, like satellite communications policy, VSAT policy etc.

43.9 For use of space-segment and setting up and operationalisation of earth station etc., the licensee shall directly coordinate with, and obtain clearance from, the network operations and control centre (NOCC), apart from obtaining SACFA clearance and clearance from other authorities.