A war over who will grab juicy opportunities in the high-stakes telecommunications game got hotter on Monday with the government announcing guidelines for operators to offer third-generation (3G) mobile telephony, with a plan to auction the relevant spectrum.
But the story got a fresh twist with the industry regulator linking it to existing licencees – and a call from him that the government must increase licence charges for new 2G entrants.
While Communications Minister A Raja, speaking for the Department of Telecommunications (DoT), unveiled the terms for the services that would enable activities like fast video downloads, Internet calls and stock trading from handsets, the tussle for spectrum got murkier.
The telecom industry tribunal, TDSAT, hearing a case involving a challenge from existing GSM-technology-based players against DoT rules, said no spectrum will be allocated before December 12. At the same time, it wanted Reliance and other CDMA players to be involved in the procedures.
DoT said around 30 MHz (megahertz) of spectrum, which is available, would be disbursed through the process of an online auction, initially only 2 to 3 operators out of the incumbents.
“Those who are not licence-holders cannot be brought under regulatory control, so they should not be allowed to participate in the auctions,” Nripendra Misra, chairman of the Telecom Regulatory Authority of India (TRAI), told a seminar at industry chamber FICCI.
The Cellular Operators Association of India (COAI), the GSM lobby, protested.
“It is bizarre that the government is proposing as many as 8 or 9 operators in every service area in the case of 2G, while seeking to introduce a near monopoly market regime in 3G,” COAI director-general T.V. Ramachandran said.
tors will have to pay additional spectrum charge, which will be 0.5 per cent of the Adjusted Gross Revenue (AGR), in addition to a one-time spectrum charge. This additional charge will be increased to one percent of AGR after three years from the date of spectrum assignment.
“Mergers will not be allowed during the initial five years. No trading/reselling of spectrum is allowed,” DoT said in a statement.
GSM operators will run the 3G services on the 2.1GHz band and CDMA operators will run their equivalent WCDMA services on the 800 MHz band.
Misra said 2G incumbents will get priority in the allocation of spectrum in new service areas on the basis of existing rules applicable for old licencees.
“ DOT should review the entry fee (for new licencees) because spectrum is linked to licence in our country. So spectrum fee and licence fee are very low and has to be revised,” he said.
An applicant who receives a pan-India permission, or Letter of Intent, currently pays Rs. 1,600 crore for a licence.
A DoT panel is studying norms for spectrum allocation for new licencees.