New Delhi: The department of telecommunications (DoT) has modified the licence agreement of Tata Teleservices Ltd (TTSL), India’s fifth biggest wireless services firm by subscribers, clearing the regulatory path for launch of the company’s GSM-based phone services, but it is not likely to be given any priority on allocation of spectrum rights among a set of telecom firms.
Spectrum refers to the airwaves that allow communication between wireless devices such as mobile phones and walkie-talkie radios.
Both Reliance Communications Ltd (RCom) and TTSL, India’s top firms using the so-called code division multiple access (CDMA) technology, were allowed by DoT late last year to start phone services using GSM, a rival technology platform that serves around 75% of more than 230 million mobile phone users in India.
The approval enables these firms to compete more effectively against rivals Bharti Airtel Ltd and Vodafone Essar Ltd.
Date issues: Managing director of Tata Teleservices Anil Sardana.
While DoT amended the licence for RCom in October last year, enabling a quick allocation of GSM radio spectrum earlier this year, TTSL’s application got amended just last week.
“We submitted our spectrum application to WPC immediately after the amendment of the licence was issued,” a TTSL spokesperson said.
WPC is short for the wireless planning and coordination wing, a government agency that distributes spectrum rights among different users.
TTSL will be in line for spectrum allocation depending on when it made its application at WPC, which follows a first-come, first-served rule, a senior DoT official said. “We are going to give spectrum based on the date of application made at WPC; there is no preference for companies seeking cross-over radio spectrum,” said the official, who is involved with the allocation of spectrum, asking not to be identified.
Around nine telecom aspirants—STel Ltd, Shyam Telelink Ltd, Swan Telecom Ltd, Loop Telecom Pvt. Ltd (a subsidiary of BPL Mobile Communications Ltd), Spice Communications Pvt. Ltd, Idea Cellular Ltd and TTSL, besides Unitech Ltd and Datacom Solutions Pvt. Ltd (a subsidiary of Videocon Industries Ltd)—have signed more than 100 telecom licences with the government, and have applied separately for radio spectrum at WPC.
However, in order to avoid any debate about the priority of spectrum allocation, the government plans to dole out start-up spectrum to more than nine firms, including TTSL and real estate firm Unitech, in four states.
“By end of March, we should be able to allocate start-up spectrum to all the licence holders in four licensed areas of Andhra Pradesh, Kerala, Orissa and Tamil Nadu,” the official added. These four states have almost 40MHz of excess radio spectrum.
This means that whenever DoT allocates radio spectrum for the remaining 16 service areas, depending upon the availability of spectrum, TTSL will have to wait until other applicants before it are allocated frequency rights. “During the next round of spectrum allocation, we are less likely to have sufficient airwaves to accommodate all companies at one go; that’s when the date of WPC application will count,” the DoT official said.
“If WPC allocates spectrum based on the date of making application at WPC, Tata’s GSM plans would definitely get hit because many others would be ahead of Tata Teleservices,” said Yogesh Kirve who tracks the sector at Mumbai-based Anand Rathi Securities Ltd.
The uncertainty in spectrum allocation could also impact TTSL’s GSM equipment purchase contract for more than 30 million phone lines. “They may want to procure equipment for the four states where spectrum is available, and order more as the roll-out progresses,” said a senior executive at a telecom equipment firm, who did not wish to be identified.
The TTSL spokesperson declined comment on delays in allocation of spectrum, as a decision of the Delhi high court is pending on the issue. The high court has reserved its judgement on the issue of CDMA firms being given GSM spectrum rights and a new subscriber-linked formula for radio spectrum allocation.