India - 3G

DoT defies TRAI, to open 3G for foreign players

NEW DELHI: Global telcos who have so far not entered the India telecom market can do so through the 3G route. The department of telecom (DoT) has decided that any player, including foreign operators, will be eligible to bid for third generation spectrum when these frequencies are auctioned by the government.

The DoT move marks a change from sector regulator TRAI's recommendation that only existing operators be allowed to bid for 3G spectrum during the auction. "We have decided to allow all players. All the new applicants and foreign firms can bid for 3G spectrum during the auction," telecom secretary Dinesh Mathur told mediapersons.

Mr Mathur's comments come even as cellular operators have threatened to go to court if the government were to allow foreign players (who are not present in India) to bid for 3G spectrum. At present, all telecom services in India are offered on 2G (second generation radio frequencies). Since 3G spectrum can be used both for voice and high-speed data applications, any new player who wins the bid for 3G spectrum can also enter the traditional voice and SMS market.

When asked if there could be any option other than an auction for allocation of 3G spectrum, Mr Mathur said that the DoT was also considering the standard allocation procedure. "This is the other option that is possible - we have worked out a criteria for this also," he said. However, DoT sources later confirmed that after examining both the auction and allocation methodologies, the department had already finalised its decision to go in for an auction.

Mr Mathur also said there was enough 3G spectrum to accommodate three to four operators. Rejecting TRAI's recommendations, the DoT is also learnt to have decided that one of the slots will be reserved for BSNL, sources added. This implies, if only four players can be accommodated, and one slot be reserved for PSU telcos, all existing operators and global giants will have to bid for just three slots.

Existing operators have warned the government against allowing foreign players to bid for 3G spectrum. In fact, Tata Teleservices, in its communication to DoT had alleged that the latter was 'completely disregarding the recommendations of telecom regulator TRAI for facilitating the progress of existing GSM and CDMA operators from 2G to 3G services'.

"The interests of existing telecom licence holders who have done so much to make India the fastest telecom market in the world must be protected and a level-playing field provided to them," the company had said. Endorsing Tatas stance, GSM-based operators too said that "the existing 2G players must have the first right to use 3G spectrum as and when it is made available for allotment".

"The existing licensees have the first right to use of 2.1GHz /3G spectrum as and when it is made available for allotment. TRAI, too, in its recommendations of September 2006 had stated that the priority for allocating scarce spectrum must first go to the existing licensees," Cellular Operators Association of India (COAI) said in the communication to DoT.

From Economic Times of India