Govt finds 'acceptable' spectrum formula

The government struck a cordial note with the GSM mobile lobby by agreeing on the Telecom Regulatory Authority of India's (Trai's) norms for spectrum allocation, a move described by rival CDMA player Reliance Communications (RCom) as "succumbing to pressure".

The spectrum, however, will be allocated in multiples of 1 MHz, against the older practice of 2.4 to 2.8 MHz.

Communications Minister A Raja has asked telecom secretary DS Mathur to file an affidavit in the Delhi High Court, which had last week refused to stay the government's process for awarding spectrum on a plea by the GSM lobby comprising companies such as Bharti Airtel and Vodafone-Essar.

The GSM lobby Cellular Operators Association of India (COAI) had moved the Delhi High Court after it failed to get any relief from the telecom tribunal, where it had earlier challenged the subscriber-linked norms for allocating spectrum, proposed by the Telecom Regulatory Authority of India (Trai).

The Trai norms, which link subscriber numbers to additional spectrum allocation, had suggested a doubling to four-fold increase in subscriber numbers for telecom operators to qualify for additional spectrum from the government.

These numbers, however, are lower than those prescribed by the Department of Telecom's (DoT's) Telecom Engineering Centre (TEC), its technical wing, which had recommended a 15-fold increase in subscriber-linked norms for allocating spectrum, the radio frequencies that enable mobile communications.

Last week, a spectrum allocation committee set up to examine the issue had said the government could choose either Trai or TEC recommendations.

In sharp contrast to its earlier position, COAI director general T V Ramachandran said the GSM operators were "quite comfortable with these norms."

However, RCom, the country's largest CDMA player, claims that "dominant private GSM operators will further enjoy excess spectrum which they are not eligible for and are getting free".

RCom has maintained that GSM operators have cornered excess spectrum of more than 50 MHz across circles, which has deprived new players and blocked competition in mobile telephony.

CDMA operators claim that the TEC norms, though far more stringent, were more acceptable because they had a "scientific" basis.

While the climb-down from TEC report to Trai norms will benefit GSM players such as Bharti Airtel, Vodafone-Essar and Idea Cellular, the halving of the multiples in which spectrum will be allocated would mean additional capital expenditure for them.

Meanwhile, it is not clear when the government will issue Letters of Intent to mobile aspirants, although neither the telecom tribunal nor the Delhi High Court has stayed the process of issuing letters or spectrum to CDMA-based operators entering the GSM segment or to new players that want to start GSM services.