Information technology and communications minister Andimuthu Raja has declined a proposal by the department of telecommunications (DoT) to distribute frequency in many spectrum-surplus areas to mobile phone service firms, including Vodafone Essar Ltd, Idea Cellular Ltd and Aircel Cellular Ltd that have applied for licences in these places.
DoT had proposed to distribute spectrum in circles such as the North-East, Assam, Orissa and Jammu & Kashmir where, due to the low subscriber numbers, spectrum handouts were low and spectrum was in surplus.
Telecom minister A. Raja takes a go-slow approach.
A spectrum is essentially a range of frequencies; telecom firms need to be allocated a certain “volume” (or bandwidth) of a specific frequency to start offering their services.
Vodafone, Idea and Aircel, all trying to achieve a pan-India footprint, had paid combined licence fees of nearly Rs2,000 crore to the Union government in December and were promised spectrum “as and when available”.
After nearly seven months of deliberations, DoT had, in July, identified circles such as those in eastern India and Orissa as places where spectrum is available and the new licensees may be given their first allotment of spectrum to start services.
A DoT official, who asked not to be identified as he was not the authorized to speak to the media, said the minister has clubbed the first-time allotments with the allocation of extra spectrum to the existing players in the circles. “The minister has noted on the file that since both are voice spectrum, it is better to wait for the resolution (of how to allocate extra spectrum to existing players) before allocating the first batch of spectrum to the new players,” the official said. Calls to minister Raja’s office for comment were not returned.
The Telecom Regulatory Authority of India is expected to comment on whether the current policy of giving extra spectrum to existing players in tandem with increase in their customers should be changed or not, as part of its larger recommendations on key regulations in the telecom sector.
As of now, DoT allocates an initial bunch of 4.4 megahertz (MHz) spectrum soon after awarding the licence and then allots extra spectrum of around 2.2MHz each when the number of subscribers increases.
The minister’s decision, taken on Tuesday, has disappointed companies. “Our business plans have been blocked because of an issue that has nothing to do with the initial allocation of spectrum to start our services,” said a senior executive of one of the companies, requesting anonymity because the decision had not been officially conveyed to his firm.
Though companies such as Spice Telecom Ltd and Idea have been pressing for licences across the country, only 24 licences were issued by DoT last year in keeping with its policy of issuing licences only when it sees a chance of allocating initial spectrum soon after. Aircel has the largest number of licences without spectrum (13 circles) followed by Vodafone (8) and Idea (2).