Panel allows GSM, CDMA within same licence

In a move which paves the way for Reliance Communications to become a pan-India GSM player, the Telecom Commission is learnt to have cleared the recommendation of the telecom regulator permitting existing licensees to use alternative technology by allocating them dual spectrum.

In simple terms, it means a CDMA players like Reliance can also operate GSM services and get the required spectrum from the government within the same licence.

Earlier, they were allowed spectrum either for CDMA or for GSM within the licence. However, now they have to pay an amount equal to the entry fee of a UASL licence (over Rs 1,680 crore for a pan-India licence) to get the spectrum as recommended by the Telecom Regulatory Authority of India (Trai).

The Commission's decision, however, has to be cleared by Communications Minister A Raja.

Reliance, which is a pan-India CDMA player, had made a request to the government in February 2006 asking for GSM spectrum in over 15 circles across the country under its existing licence on the 1800 MHz band.

The company already operates GSM services in eight circles, including Orissa, Bihar, Kolkata, Karnataka, West Bengal, North-East and Assam, with a subscriber base of over 5 million.

Following its spat with technology provider Qualcomm on high royalty payments for the proprietary technology, the company had announced it preference for the GSM mode.

The Reliance Dhirubhai Ambani Group has also applied for a fresh pan-India UASL licence through two companies "" Swan Telecom and Cheetah, in which it has less than 10 per cent equity stake. It is amongst the 30 companies which recently put in their applications.

Analysts say the move was made primarily as an alternative plan in case the government decided to disallow allocation of dual spectrum.

It is also learnt that the Telecom Commission has rejected a proposal which entails that the issue of reservation of spectrum for expansion of networks of existing operators, should be referred to the Trai. The law ministry is believed to have suggested the matter be referred to the Trai for its opinion.

On a proposal to hike the revenue share percentage steeply beyond 6.2 MHz, the Commission decided that a final decision would be taken only after the Telecom Engineering Centre (TEC) gave a final report on changes in the subscriber criterion for allocation of additional spectrum.

Trai had recommended the subscriber criterion be changed substantially for allocation of additional spectrum, a move which has been opposed by GSM operators.

The government has referred the regulator's recommendation in this regard to the TEC.

The Commission has also cleared Trai's recommendation to segregate subscriber base and annual gross revenue (AGR) into wireline, GSM and CDMA.

This has been done so that telcos using dual spectrum can determine the revenue share to be paid by them (as spectrum charges) which varies according to the circle area.