The Cellular Operators Association of India (COAI) which clubs mobile phone operators based on GSM technology has served a legal notice to the Department to Telecommunications (DoT), seeking wireless spectrum which it says it has a right to get under government guidelines.
“This is a defensive action and as per the DoT guidelines of March 2006 we are entitled up to 15 MHz of spectrum," said TV Ramachandran, Director-General of COAI, said in a statement.
While the COAI is betting on getting the maximum of scarce spectrum under current guidelines, the Telecom Regulatory Authority of India (TRAI) has moved to tighten the screws on the industry, linking additional allocation of spectrum to higher efficiency of spectrum use. In effect, spectrum allocation would depend on packing more subscribers to already allotted quantity.
COAI on its part says operators are financially hit and hamstrung in providing quality services because they are short of bandwidth.
The Association of United Service Providers of India (AUSPI), the lobby group representing rival CDMA-technology based operators, meanwhile, is also pushing the DoT to allocate more spectrum - triggering an intensified tug-of-war for the scarce resource.
Better technology can boost efficiency of spectrum use, industry experts say, but for now, the tussle is over how much spectrum to have than how to use what is on hand. COAI players under regulatory pressure to perform more efficiently. Both licensing and spectrum-related rules are keeping them in a challenging regime.
Ramachandran pointed out that the extent of delay was as much as almost three years in some cases and that the shortage of spectrum for such long periods was affecting the operators.
At the crux of the war is whether the government is committed to allot the spectrum that the COAI says it rightfully deserves.
Telecom industry consultant and analyst Mahesh Uppal said there has never been any commitment on the part of government regarding spectrum allocation. “The guidelines only say that up to 15 MHz we will charge a certain percentage of revenue.
It doesn’t say that terms will not be revised. So, in my view, the court may not accept COAI's position," Uppal said.
Under the existing policy, a GSM player in Delhi and Mumbai must have a minimum of 0.6 million subscribers to be eligible for 8 MHz of spectrum, one million for 10 MHz, 1.6 million users for 12.4 MHz and 2.1 million customers before being awarded 15 MHz of spectrum.