Govt may allocate just 3.3MHz spectrum to telecom start-ups

Govt may allocate just 3.3MHz spectrum to telecom start-ups
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First Published: Wed, Apr 02 2008. 01 15 AM IST
Updated: Thu, Apr 03 2008. 03 33 PM IST
New Delhi: India’s department of telecommunications, or DoT, is evaluating whether it should allocate companies waiting to start mobile telephony services 3.3Mhz of radio waves, or spectrum, instead of the 4.4Mhz that is usually done, because there isn’t enough of it to share among the many companies in line.
Nine companies—STel Ltd, Shyam Telelink Ltd, Swan Telecom Ltd, Loop Telecom Pvt. Ltd (a subsidiary of BPL Telecom), Spice Communications Pvt. Ltd, Idea Cellular Ltd, Tata Teleservices Ltd, Unitech Ltd and Videocon unit Datacom Solutions Pvt. Ltd—are waiting for spectrum to start services. Reliance Communications Ltd, or RCom, India’s second largest wireless phone firm, has already been given a licence and spectrum rights to start services nationwide on the GSM technology platform.
The company already serves around 33 million customers on the rival CDMA platform.
With some 20MHz of spectrum expected to be made available by India’s defence forces later this year, DoT currently plans to issue frequency rights to four firms. By lowering the threshold for the so-called start-up spectrum, it will be able to accommodate up to six firms.
Phone firms in India, the world’s fastest growing mobile market that adds some eight million subscribers every month, have been demanding more spectrum to run their networks. Radio spectrum, an increasingly scarce resource, carries voice signals between mobile handsets and enables wireless communication.
“This (reducing the amount allotted) could be a possibility because we need to accommodate all, and also ensure that there is spectrum available to meet the future need of these companies,” said a senior DoT official who did not wish to be identified. “However, we plan to take this issue up with the new entrants.”
In the past, incumbent operators such as Bharti Airtel Ltd and RCom were given an initial chunk of 4.4Mhz for starting phone services.
Meanwhile, the wireless planning and coordination (WPC) wing says any such move could invite another set of litigation against the government.
“There is a need to have a more long-term approach for spectrum allocation and sufficient thought should be given while issuing licences,” said a senior WPC official who did not wish to be identified. WPC is responsible for accepting and processing applications for spectrum allocation.
As of now, going by the spectrum available before release of frequencies used by the defence, phone service aspirants can get radio spectrum in just four licensed areas—Andhra Pradesh, Kerala, Orissa and Tamil Nadu (including Chennai)—as DoT has identified these states with sufficient radio spectrum to have nine start-up service firms which have been invited to set up phone networks.
As reported by Mint on 17 January, India’s most lucrative telecom markets, Mumbai and New Delhi, are unlikely to see any new phone services operator until the country’s defence forces free up spectrum in these cities.
One expert said if the start-up spectrum norms are changed, it could affect the scalability of the new businesses. “Lesser spectrum means lesser capacity and a lower number of customers,” said Prashant Singhal, telecom practice leader at audit and consulting firm Ernst and Young’s New Delhi offices. “If the start-up spectrum is less than 4.4MHz, the specifications of equipment will change.”
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First Published: Wed, Apr 02 2008. 01 15 AM IST
More Topics: Spectrum | Telecom | DoT | GSM | CDMA |