The Department of Telecom (DoT) is in favour of allowing foreign players in the 3G segment, while TRAI says it should be limited to existing players as permitting foreign players would negatively affect the affordability of services.
A section in the DoT has also expressed concern over TRAI's interference on policy issues and said the regulator's powers are limited to giving recommendations and the policy has to be framed by the government.
TRAI had earlier written a letter to the finance secretary cautioning the ministry over permitting foreign players in 3G services and also to the telecom secretary, saying there would be enough competition among the existing mobile operators.
Asked whether the issue has been referred to the eGoM, sources said DoT has not taken a final view but a decision is likely soon.
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Communication and IT Minister A Raja is understood to have discussed the matter with Prime Minister Manmohan Singh and Finance Minister P Chidambaram, sources said, but the outcome of the meetings was not known.
Raja had recently said foreign players will be allowed to offer 3G services in India and modalities of allocating spectrum through auction for 3G services would be worked out soon as the matter has been referred to the law ministry.
"Whether there is common auction or open auction there is be no bar on foreign players," Raja had said. The country allows 74 per cent foreign direct investment in the telecom sector.