The GSM lobby, representing the interests of telcos offering mobile telephony services on the dominant technology platform (GSM) in India, will likely accept some of the recommendations of telecom regulator Trai on spectrum allocation released earlier this week after some of its members favoured the same.
The Cellular Operators Association of India (COAI), the GSM lobby, had earlier termed these recommendations “completely arbitrary and not backed by any scientific or technical logic”. Large telcos such as Bharti Airtel Ltd and Vodafone Essar Ltd that are part of COAI were against Trai’s recommendations that would have made it more difficult for some of them to get more spectrum and actually forced some to return spectrum to the government. The smaller telcos that are part of COAI, especially ones that do not have a presence in most parts of the country, were in favour of the recommendations that increased their chances of getting spectrum.
COAI has now tempered its earlier position. It does not want isssued spectrum to be taken back, and it wants the new allocation to be made on the basis of scientific tests. “We accept the government’s right to review the spectrum allocation criteria,” said T.V. Ramachandran, director general of COAI. “But you cannot apply the changes retrospectively to allocations already made and it must be based on logical and defendable basis,” he added.
On Wednesday, Trai had suggested to the government that the minimum-subscriber criteria for allocation of extra spectrum be increased by two to six times, depending on the size of the licence area. The suggestion, if implemented, will result in many existing operators being forced to withdraw their application for extra spectrum in many circles, some pending for two years, as they will no longer qualify for it. In addition, some operators may also have to give back the spectrum already allocated to them under the old criteria.
For example, operators in nearly all the circles have been already allocated 8Mhz spectrum under an older system which required only one million subscribers to qualify for this quantum. However, according to the new scheme suggested by Trai, they will need 1.5 to three million subscribers, depending on the size of the circle.
While COAI was initially considering asking for a complete rollback of Trai’s recommendations in this regard, internal differences have forced the association to adopt a more nuanced stance. Out of the seven members in the association, only one has spectrum in all the circles. The remaining six are hoping that they will be able to expand their footprint to areas where they currently have no spectrum as the defence forces vacate around 20MHz of it by the end of the year.
However, a complete reversion to the old allocation criteria would have prevented many of them from laying their hands on this spectrum as most of the 20MHz would have been absorbed by existing operators, some of whom qualify for up to 4.4MHz each in some circles.
However, COAI still wants the new allocation norms to be be tight enough to keep CDMA operators, including Reliance Communications Ltd (RCom) out. CDMA is a rival technological platform to GSM. In most circles, GSM operators Aircel Cellular Ltd, Idea Cellular Ltd, Vodafone Essar Ltd and Spice Communications Ltd are ahead of the CDMA firms in the spectrum queue.
“We are against applying the new standards to allocations already made,” said Ramachandran. “But we are not against fine-tuning the allocation criteria a little bit, based on the scientific principles,” he added.
Ramachandran also claimed that the telecom regulator, which is supposed to consult the industry on all major recommendations, did not consult COAI before coming up with the revised criteria for spectrum alllocation. “The TEC (Telecom Engineering Centre), the government’s standard setting body for the industry, was already conducting a scientific study on the subject and the regulator should have waited for it instead of imposing an arbitrary criterion on us,” he said.
COAI’s new position will likely help maintain unity in the GSM camp, which had seen Spice Communications, Idea Cellular and Reliance Telecom Ltd come out in favour of the new allocation criteria.
In case of a difference of opinion among its seven members, the COAI goes by majority opinion.
The new position that asks for some modifications to the new spectrum allocation norms suggested by Trai is likely to be accepted by all the members except Reliance Telecom, according to officials at this company who did not wish to be identified. That’s because Reliance Telecom belongs to the Anil D Ambani Group that has a much larger telco that uses the CDMA platform, RCom.