MTNL may lose grip on CDMA spectrum

In a move that is expected to mellow down the ongoing battle for spectrum, the Department of Telecommunications (DoT) has written to state-owned telecom company Mahanagar Telephone Nigam (MTNL) to vacate the additional spectrum that was allocated to it. A similar letter is being sent to the other telecom PSU, Bharat Sanchar Nigam (BSNL), shortly.

The move will enable CDMA majors to offer services to additional 3-4 lakh subscribers in Mumbai and Delhi alone, while the numbers at other places will depend on the final allocation.

The wireless advisor of the department has asked the PSUs to vacate the currently unused third and fourth CDMA carrier spectrum for reallocation to CDMA operators based on subscriber-linked allocation criteria.

"There is a surplus of 2.5 Mhz of spectrum available with the PSUs as the companies are expected to focus on GSM technologies. This can be re-allocated to other CDMA operators who qualify for it as per the prevailing guidelines. A letter has been sent to MTNL while the letter for BSNL is under way," a high-level source in the government told Business Standard today.

The freeing up of unutilised spectrum of PSU operators can then be deployed by private operators for their expansion plans.

The suggestion of vacating the spectrum came from the private operators, as it is likely to benefit CDMA operators - particularly Tata Teleservices - as it is not eligible for fifth and sixth CDMA carriers in 800 MHZ spectrum, under the prevailing norms.

Reliance Communications, with a subscriber base of 20 million subscribers is already eligible for the fifth carrier in most metro and category A circles. Of late, the spectrum issue has been on the top most agenda of the government.

"The spectrum fee being a percentage of the Adjusted Gross Revenue (AGR) and the government stands to earn higher revenues if this precious and scarce natural resource is deployed to add more subscribers," said an industry source.

The CDMA operators have been voicing their concerns over the surplus spectrum lying unutilised by the state-owned BSNL and MTNL, even as they are facing an acute shortage to support their growing subscriber base.

The move might not invite opposition from the GSM camp as the current fight between operators using the two technologies is focused on the allocation of 1900 MHz for 3G services.

At present, there are 4 CDMA operators - BSNL, MTNL, Reliance Communications and Tata Teleservices - and 14 carriers of 1.25 MHz each in 800 MHZ band can be allocated to them.