DoT likely to allow only 3 pvt telcos to offer 3G services

Posted by blog master Monday, January 11, 2010

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NEW DELHI: In yet another twist to the upcoming third generation (3G) spectrum auctions, the department of telecom’s (DoT) draft notice for
inviting applications (NIA) for the spectrum sale said that the process will be limited to three private GSM operators.

For CDMA operators, the draft (NIA) states that the auctions will be limited to only one player per circle, adding that the sale of airwaves will not be held in six circles — Delhi, Mumbai, Andhra Pradesh, Rajasthan, Punjab & Maharashtra.

Last month (on December 21), a nine-member empowered group of ministers (EGoM), headed by finance minister Pranab Mukherjee had decided that these airwaves would be given to four successful private GSM bidders during the auction process in addition to one slot reserved for state-owned telcos — BSNL & MTNL.

As first reported by ET on December 22, the EGoM, while deciding that the airwaves would be given to all successful bidders only in August 2010, had also said that telcos will be required to pay only a quarter of the bid amount this fiscal and the rest when the spectrum is allotted.

In fact, the panel of ministers, during their meet last month, had decided to auction four slots after debating a DoT proposal to limit the number of private players to three. But, the DoT move to stick to its earlier proposal and limit the auction process to three GSM players in the draft NIA highlights the communication ministry's lack of confidence in the armed forces agreeing to vacate 3G spectrum as per mutually agreed time frames.

A top DoT official had earlier told ET that the communications ministry had enough radio frequencies to accommodate a minimum of three players in every circle. “The armed forces have failed to adhere to an MoU between the communications and defence ministries earlier this year, where they had agreed to vacate 10 MHz of airwaves (for two telcos) prior to the auction,” the DoT official had added.

Last week, another DoT official had told this newspaper that the communications ministry wanted to restrict the airwaves sale to the frequencies it currently holds as the armed forces may not meet their commitment to vacate additional radio frequencies between June and August, 2010. The armed forces have said that it will free up to 5 MHz of 3G spectrum, equivalent to one slot, in July and a similar amount in August 2010, a commitment that DoT fears that the defence ministry may not keep.

Third generation (3G) spectrum will enable telcos to offer high-end services, such as ultra-fast internet, video-conferencing, interactive gaming, mobile TV and high-speed downloads of movie and music clips on mobile phones. 3G services were originally scheduled to be launched in India in 2007, but have been repeatedly delayed amid troubles over freeing up spectrum and setting bid prices.

First launched in Japan in May 2001, the services are available in over 90 countries.

It is not clear if the DoT will make changes to the draft NIA before making it public within the next couple of days. The NIA will be a legally binding document providing all details regarding the sale of airwaves including the exact availability of 3G spectrum in each circle. It will also detail the payment format and timeframe. The draft NIA also adds that the final date for applications is January 25, with the mock auctions scheduled for February 9-10, followed the actual sale process two days later.
source-economictimes.indiatimes.com