New Delhi: In a new escalation of an ongoing dispute over airwaves, or spectrum, for mobile phone services, Bharti Airtel Ltd and Vodafone Essar Ltd, two of the largest providers of such services in India, along with other GSM peers, are widely expected to file a legal appeal against a telecom tribunal order that allowed the government to allocate radio spectrum to those waiting to start phone services in new areas.

Meanwhile, India’s Department of Telecommunications, or DoT, is set to allocate airwaves to new entrants and tighten allocation norms for giving additional spectrum to existing operators.

Going ahead: Shakeel Ahmad, minister of state for IT and communications. (Sonu Mehta/Hindustan Times)

“We are looking at various options including this, but have not yet decided anything yet," said T.V. Ramachandran, director general of COAI. “We do not have enough options but to appeal against the order," added the chief executive of one GSM operator, who did not wish to be named.

“One can file a writ petition in the high court challenging (the tribunal’s) interim order, but you cannot appeal against an order as per the Trai Act," said Manjul Bajpai, president of the Telecom Lawyers Association.

For his part, Arun Kumar, the chairman of the tribunal—Telecom Disputes Settlement and Appellate Tribunal—had said he would not interfere in policy matters of the government.

“Let the government decide on it," he said in reaction to the GSM lobby’s plea on 12 December.

Indeed, DoT said it would go ahead and allocate radio spectrum not exceeding 6.2MHz to operators such as Vodafone Essar and Idea Cellular Ltd, who are waiting to start their services in new areas, in addition to companies that have been allowed to use dual technology to offer phone services, including Reliance Communications Ltd, which primarily uses the rival CDMA technical standard.

After the tribunal’s order, “we have started processing the applications and will be allocating spectrum to those waiting in the queue," Shakeel Ahmad, minister of state for communications and information technology, told Mint on the sidelines of the India Telecom 2007 event on Saturday. “We should be able to resolve these issues within a fortnight."

Analysts, such as Prashant Singhal at Ernst and Young, predict that GSM operators and DoT are likely to compromise in the end.

“You cannot stop the government from allocating the start up spectrum, because it is being done within rules of the NTP (national telecom policy) 1999," he said. “If the government decides to delink spectrum from telecom licence, new entrants will be required to pay a separate fee for spectrum, which will make existing GSM operators happy."

In a related development, many GSM operators are now demanding that airwaves be auctioned in order to avoid a long-drawn legal battle, which will affect the industry.

India’s biggest mobile phone company by subscribers, Bharti Airtel, has said it would offer Rs2,650 crore for an additional 4.4MHz of radio spectrum and even raise the bid in case there is an auction involving other firms.

India’s third largest mobile phone carrier by customers, Vodafone Essar, also said it favours the auction route.

“We will participate if there is an auction, I think that’s the only practical solution left now," a senior official of Vodafone Essar, who didn’t want to be named, said last week. “We do not plan to announce any bid price for spectrum as of now."

Meanwhile, Andimuthu Raja, minister for IT and telecommunications, is ruling out an auction, citing legal obstacles.