New Delhi: India’s department of telecommunications, or DoT, plans to allow at least five licences for the so-called third generation, or 3G, mobile phone services in a circle, as licensed areas are called in the country, as the defence forces are likely to make available more radio spectrum, telecom secretary Siddarth Behura has said.
Earlier, the department had planned to allow three 3G phone firms in each circle, including state-owned Bharat Sanchar Nigam Ltd, or BSNL, and Mahanagar Telephone Nigam Ltd.
Third generation mobile phone services allow users to surf the Internet or download content, including music and video, at speeds faster than current technologies deployed on Indian networks allow.
Yes to change: The decision to raise the number of 3G phone cos would lead to more market consolidation. (Photo: Ramesh Pathania/Mint)
The draft guidelines for 3G phone services are ready, the secretary said, after taking into account comments from the country’s telecom regulator. “We will be sending it to the minister (for communications, Andimuthu Raja) for his concurrence,” Behura said in a recent interview.
“We are looking at more than five operators in a circle, and this will depend on the availability of spectrum... It can be more in some circles,” Behura said. “The guidelines have been looked into by the Telecom Commission.”
India’s defence forces are likely to clear “extra spectrum in the next two-four months”, the secretary said, adding that the government expects to make an announcement next week. Radio spectrum, an increasingly scarce resource, carries voice signals between mobile handsets and enables wireless communication.
The DoT was considering increasing the number of 3G phone firms in each circle by five, the Business Standard newspaper reported on Friday.
The department’s rethinking comes after the Telecom Regulatory Authority of India’s recommendations made on 16 July asking the department to conduct trials to verify if spectrum in two different bands can be allocated to 3G phone firms in the same licensed area.
An expert said a DoT decision to increase the number of 3G phone firms would lead to further market consolidation. “There will be existing operators who will be offering services and some new foreign players will also be allowed,” said Usha Rajeev, leader of the information and communications practice at consulting firm PricewaterhouseCoopers. “In that case, foreign players are unlikely to come in to offer only 3G services.”
These firms, she predicted, will buy smaller firms offering cellphone services in the market today.
An analyst firm has forecast that India will have some 730 million mobile phone customers by 2012 and every fifth among this user base will be using a 3G connection.
“The reasons for the increased (phone) usage will be that most of the pan-Indian telecom operators would have deployed 3G. There will be smart phones and handsets available at affordable prices and data utility in mobile phones” will take centre stage, said Madhusudan Gupta, senior analyst at research firm Gartner Inc.’s Singapore office.