The government-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) are set to have a first mover advantage in 3G services as private CDMA and GSM service providers fight over issues related to timings and rules of spectrum auction.
The two companies have already placed orders and have started rolling out their networks, while the dispute between the two associations of GSM and CDMA players are likely to delay the auction, being planned by the Department of Telecommunications (DoT).
A month ago, DoT allocated spectrum for 3G services to BSNL and MTNL without auction. This will give the two companies a first mover advantage as the private players including Airtel, Reliance, Tata, Vodafone and Idea will get spectrum only through auction.
“We have ordered equipment for 3G services in most of the places,” said Kuldeep Goyal, CMD of BSNL. “Services will be available in North and East zones by the end of this year. By next quarter our services will be available in most of the cities." The company will have a capacity of 5 million broadband connections by mid-2009. MTNL's 3G services are slated to launch by the end of this year. “We will be the first in India to launch 3G services,”said MTNL CMD RSP Sinha. “Our core network is 3G enabled,” said Kuldeep Singh, director (technical), MTNL.
“We have already issued advanced purchase orders to Motorola and ITI for procuring equipment and setting up the network.” The company will have a combined capacity of 1.5 million lines in Delhi and Mumbai by March 2009.
Making matters worse for private players is the controversy surrounding the process for auction of spectrum. While CDMA players allege that the methodology of revenue share for 3G services is not clear, GSM players claim this is only a tactic to delay the auction.
DoT’s guidelines envisage different revenue shares for 2G and 3G services. CDMA players claim that it is not possible to differentiate between the revenues of 2G and 3G services.