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Spectrum delayed is growth denied—that may be exactly the thought running through the minds of some of the country’s biggest telecom czars, as well as the 46 promoters who have applied for new licences and spectrum.

By Amit Mukherjee | Print Edition: Dec 02, 2007

Almost everybody in the wireless sector has a gripe.

Spectrum delayed is growth denied—that may be exactly the thought running through the minds of some of the country’s biggest telecom czars, as well as the 46 promoters who have applied for new licences and spectrum. The spectrum policy is headed for yet another hold-up, with the government mooting a new panel of industry players and experts to revise norms for allotment to wireless telecoms operators.

Meantime the industry dispute over the allocation issue is becoming more intense. The fracas has reached a crescendo with the major telecom operators—both GSM and CDMA—shooting off letters to the Prime Minister, alleging use of unfair tactics by competitors to grab the telecom pie. CEOs of wireless majors like Vodafone and Bharti Airtel have written to the PM and Communications Minister A. Raja, complaining against the stiffer spectrum allocation norms proposed by the Telecommunication Engineering Centre (TEC), an arm of the department of telecommunications (DoT).

Anil Ambani
Anil Ambani

In its report, the TEC has recommended a 4-15 times higher subscriber base as a qualification for doling out additional spectrum to existing GSM players.

Even Anil Ambani, Chairman, Reliance Communications (RComm), which uses CDMA technology, wrote to the PM. He accused some “large GSM players”—which industry analysts read as a reference to Vodafone and Bharti—of spreading “misleading and false propaganda” to block fresh competition in telecom, hoard spectrum and indulge in “anti-consumer practices like cartelisation.”

Spectrum isn’t the only issue fuelling the war. GSM operators have also challenged the government’s move to permit dual technology where service providers can offer both GSM and CDMA services under the same licence. GSM operators say that permitting dual technology is impermissible and illegal and is done with the aim of dislodging other operators from the queue. The Cellular Operators Association of India (COAI), the body representing all GSM operators, has even said that DoT’s move was equivalent to “twisting rules to benefit one operator” (read R-Comm).

The telecom ministry had plans to start allocation for additional and new wavelengths, with 46 new applicants getting increasingly nervous over the fate of their 575 applications for licences/spectrum. According to the government plan, those who applied for UASL (Unified Access Service Licences) after September 25 are likely to be eliminated from the race. This will leave 26 big firms, including DLF, Videocon, Sterlite, Moser Baer and AT&T in the cold. Also, the plan to prioritise allocation to existing GSM players, putting on hold the application of CDMA players (who have sought fresh spectrum for GSM services), has also left the affected parties unhappy.

If the DoT does stick to the September 25 cut-off, 20 of the 46 applications—seven of whom applied for pan-India licences—will be amongst the lucky ones to receive letters of intent for 241 applications. These include Idea Cellular (with 9 applications), the Guntur’s Jayalakshmi Group-promoted ByCell (five), Tata Tele (three), Spice (20), HFCL (21), Skycity Foundations and Mauritius-based Telecom Investments-promoted S. Tel (22), Parsvnath (22), Datacomm (22), Oswals (22), Essar (21), Unitech (eight), Shyam (21) and Indiabulls (22). At the time of writing, the matter was pending before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) as GSM operators have moved it against the DoT’s decision to allow dual technology for mobile telephony and raising the subscriber limit for giving additional spectrum.

In the meanwhile, COAI has filed additional affidavits before the TDSAT, questioning the authenticity of the expert committee report and allocation of additional spectrum to state-run firms BSNL and MTNL. This affidavit would widen the scope of COAI’s original petition challenging DoT’s decision to allow operators to offer mobile services using both GSM and CDMA technologies simultaneously in the same circle. Clearly, the stakes are high in this high-growth sector, which for the moment though is stuck in quicksand.

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