A tough business day dawned for GSM-based incumbents and new telecom licence aspirants alike on Friday as the government clearly revealed its hand.
The Department of Telecommunications (DoT), enunciating its policy that licences could be had by unlimited entry, said aspirants who entered the fray after the telecom regulator allowed unlimited players in August could use landlines to join the industry, dashing their hopes of soon getting spectrum somehow.
It was also revealed that three CDMA players including Reliance had won permission to enter GSM technology-based services. GSM incumbents got another jolt when it was clearly told to them that further spectrum would be linked to subscriber growth – snubbing their demand for early stocks to fuel future growth.
DoT’s unit, Telecom Engineering Centre(TEC) will monitor spectrum usage to decide on allotments. Each additional megahertz will be paid for.
The announcement has also created uncertainty for even those 22 GSM incumbentssuch as Idea, Aircel, Vodafone, Spice which have been waiting to get spectrum for expansion plans.
T.V. Ramachandran, Director General, Cellular Operators Association of India said that he would be able to comment only after “studying the shocking development.”
“In case UAS (Universal Access Service) licencee is not allocated spectrum due to non-availability, the licencee shall endeavour to roll out services using wireline technologies. This will also apply to those licencees who are awaiting initial spectrum allotment” the DoT said.
DoT has not just dampened the spirit of all those 46 new telecom wannabes. Companies like AT&T, Sterlite infrastructure, DLF, Unitech, Moser Baer were among these.
Meanwhile, CDMA players Reliance Communication, HFCL and Shyam Telecom have won permission to run GSM operations, and COAI, which groups GSM players, is upset has lodged a protest with the DoT. COAI is worried about competition for spectrum.
Reliance and HFCL on Friday paid Rs 1651 and Rs 151 crore as entry fees for GSM operations across India and in the Punjab circle respectively. Incidentally Reliance also has 9.81 per cent holding in Swan, a telecom aspirant in the queue to get new licences.
At present, R Com under Reliance Telecom provides GSM services to 5 million subscribers in eight telecom circles.
"The Unified Access Service Licenses are technology neutral and the grant of approval to Reliance Communications for offering nationwide GSM services reaffirms our stand,” R Com said in a statement.
(Additional reporting by Indulal PM in Mumbai)