New Delhi: The Department of Telecom (DoT) is likely to permit additional players, including foreign ones, in 3G telecom services in view of the fact that increased competition would give higher revenues while auctioning the spectrum.
According to official sources, DoT has said that currently there are about 9-10 mobile operators in each circle and with more players in the fray government can get additional revenues at the time of auctioning of 3G spectrum.
Asked whether additional players could be foreign operators, sources said they can bid for 3G spectrum provided they have Indian partners as the permissible FDI limit is only 74%.
DoT is likely to announce final guidelines on 3G telecom services, including number of players who can participate, in next 10 days.
This is contrary to regulator TRAI’s recommendation that foreign players should not be allowed to enter 3G services at this juncture, else this will have serious implications for the Indian telecom sector.
TRAI Chairman Nripendra Misra had recently also cautioned the Finance Ministry over the entry of foreign players.
“As the Authority firmly believes that allowing participation of new prospective service providers for 3G services, at this juncture, will have serious implications on the Indian telecom sector, you may like to revisit the issues before finalising the Ministry’s position on the subject,” Misra said in a letter to Finance Secretary D Subbarao.
Last month, TRAI had rejected DoT’s proposal to reconsider allowing foreign players to offer 3G telecom services, with the regulator saying existing players would be able to roll out network faster.
“As the existing licensees have already made huge investments in infrastructure and their systems are in place, therefore, they will be in a better position to deliver 3G services efficiently at low incremental cost,” TRAI had said in its views on Permitting New Entity for 3G Services.
The regulator said that with the number of service providers going up to 13-14 in each circle, there would be sufficient competition to ensure that the spectrum is priced competitively, discourage cartelisation and offer services that are acceptable in terms of quality and price.
Meanwhile, DoT is discussing the matter with the Finance Ministry over the pricing of 3G spectrum and may soon announce the final guidelines.