New Delhi: India’s second biggest mobile phone firm by subscribers Reliance Communications Ltd (RCom) will receive radio spectrum for offering phone services based on GSM technology (short for global system for mobile communications) this week, senior officials at India’s department of telecommunications (DoT) said.
“The wireless planning and coordination (WPC) wing will be allocating the spectrum to RCom, Vodafone Essar Ltd, Idea Cellular Ltd and Maxis Aircel Ltd by late tonight or tomorrow,” said a senior WPC official, who didn’t wish to be identified.
Reliance had already paid Rs1,651 crore to DoT as entry fee for the licence in October in addition to applying for spectrum.
Rising competition: By 1 October, the last date for submitting applications, some 46 firms had applied for spectrum and new telecom licences. (Photo: Rajeev Dabral/ Mint)
Under the dual-technology regime introduced by the telecom department in October, companies such as Reliance, which run CDMA (short for code division multiple access) networks, were allowed to move into GSM services.
The same official noted that only Reliance was found eligible for the crossover GSM spectrum “because licensing agreements of other CDMA operators, such as HFCL Ltd and Shyam Telelink Ltd, were yet to be modified.”
Meanwhile, with the government seeking to introduce fresh competition in what is now the world’s fastest growing mobile phone market, some nine new applicants, including Chennai-based S Tel Ltd, as well as existing companies such as Spice Communications Ltd, which plans to offer services across the country, were issued a letter of intent by the department on Thursday.
“Some of these companies have submitted their applications for radio spectrum on Thursday, having already paid Rs1,650 crore as licence fee to the government,” confirmed a senior department official, who also didn’t want to be identified.
After the department issues the letters, applicants pay a licence fee and become eligible for signing a so-called access service licence agreement with the government. “As of now, we have the policy of issuing spectrum on a first-come, first-served basis, giving priority to those who have applied early,” said one official,
By 1 October, the last date set by communications and information technology minister Andimuthu Raja for new applications, some 46 firms had applied for spectrum and new telecom licences. But the department official said that only applications received through 25 September will be processed for now. “Those who have applied after 25 September will have to wait further,” he added.
For instance, S Tel, which had applied for offering phone services across 21 Indian states, was given approval for offering services in the six Indian states, as it had applied for licences in 15 states after 25 September deadline set by DoT. “We have only been given (letter of intent) for six circles and have paid Rs25.10 crore towards the licence fee,” said Santosh Robert, director of S Tel. The company has been allowed to offer services in Jammu and Kashmir, the North-East, Assam, Bihar, Orissa and Himachal Pradesh.
Analysts tracking the telecom sector such as Romal Shetty, who heads consulting firm KPMG’s telecommunications practice, said Thursday’s announcements only solved the problem partially, as the bigger issue of spectrum allocation still looms large.
“They still need to sort out how is additional spectrum going to be allocated—they have not yet reached any solution for the subscriber-linked criteria, which is being debated and is facing litigations,” he said.
The Cellular Operators Association of India, a lobby representing GSM firms, has filed petitions before a telecom appellate tribunal and the Delhi high court, challenging any move by the government to allocate spectrum under the dual-technology clause, apart from asking the government to review tougher norms for allocating radio spectrum based on the number of phone subscribers served by the phone firms.