Trai shoots off another letter to telecom dept

In a move that could derail the spectrum allocation plans, the Telecom Regulatory Authority of India (Trai) has shot off another missive to the Department of Telecommunications (DoT), stating the latter had deviated from its recommendations.

The regulator also stated it had suggested a "status quo" in the existing telecom policy.

Trai said that it learnt from the DoT press release of January 10 that the government had accepted the recommendation of the regulator and that no cap be placed on the number of service providers. Accordingly, the DoT has decided to issue Letters of Intent (LoIs) to all eligible applicants.

Clarifying on this issue, a highly placed source said that no limit, according to Trai, does not mean unlimited and the regulator had suggested that cap for service providers should be left to be decided by the market forces.

This means that the number of players should be left to be decided by market forces, depending on the availability of spectrum and not unlimited number of licences to be issued.

This also means that there is no change in National Telecom Policy of 1999 (NTP-99) and recommendation of no cap meant maintaining "status quo" and not issuance of unlimited licences, they added.

According to sources, the DoT's move was not in line with the regulator's recommendations, and the department should have formally consulted the regulator "if it wanted to deviate from the totality of recommendation".

Trai also mentioned that in its recommendation on 'Review of Licence terms and conditions and capping of number of access providers', dated August 28, 2007, it had recommended a transparent system (queue system for allocation of spectrum).

Stating it recommended entry of new service providers, subject "only to availability of spectrum", it added: "The authority in its letter dated August 28, 2007, had confirmed the maintenance of status-quo in the existing policy of no limit on the number of access service providers, which has been the policy of the government since 1999".

"However, the authority wants to reiterate that its recommendation on the entry of new service providers has always been linked to availability of spectrum," the letter said.

"Induction of mobile service providers in various service areas can be considered if there is adequate availability of spectrum for existing service providers as well as for new players, if permitted," it added.

The letter is in similar lines of its earlier one sent on Monday, with both the letters alleging that the DoT has deviated away from Trai recommendations while allocating LoIs for spectrum.

The DoT had issued LoIs for 22 companies for allocation of licence, upon completion of formalities.