The Hindu Business Line : Spectrum battle reaches PM's Office

What they say
The COAI says the Government order paved the way for allotment of additional spectrum to mobile operators to fuel future growth.
Mr Tata says the order seeks to allocate spectrum on the basis of individual operators' self-proclaimed subscriber base without an established mechanism for verification.

New Delhi , May 2

The battle for spectrum between GSM and CDMA mobile phone operators has moved a notch higher with the former, represented by the Cellular Operators' Association of India (COAI), sending a letter to the Prime Minister, Dr Manmohan Singh, countering the letter written last month by the Tata Group chief, Mr Ratan Tata.

The COAI has urged the Prime Minister to `disregard' the suggestions made in Mr Ratan Tata's letter which alleged that the subscriber-linked spectrum policy was against the CDMA operators. The COAI said that the Government order paved the way for allotment of additional spectrum to mobile operators to fuel future growth of mobile services.

"We are deeply surprised to read reports that a large CDMA operator has alleged that the Government orders are disadvantageous to the CDMA operators. This is aimed at creating a controversy and disrupting the spectrum allotment process that has just been opened up. It is respectfully submitted that if such vested interests are allowed to succeed, it could have a serious adverse impact on our future growth," said Mr T.V. Ramachandran in the COAI letter.

Mr Tata had questioned the subscriber-linked spectrum allocation policy, saying, "the order seeks to allocate spectrum on the basis of individual operators' self-proclaimed subscriber base without an established mechanism for verification. By design or coincidence, the cut off level singles out one pan India operator which would be deemed to be ineligible for additional frequency in the existing bands in which it provides service."

In response, the COAI said it "reflected a lack of understanding of ground realities and the legacy of this approach. The CDMA operator is perhaps not aware that the subscriber link approach was adopted by the Government after extensive consultations with the industry, as the only practical solution in the absence of an upfront availability of adequate spectrum for all the access providers."

Mr Tata had also suggested a spectrum charge of around Rs 1,500 crore instead of giving it for free to operators. He said that while such a move would add to the Government's revenues, it would not risk an increase in telecom tariffs, which is being driven by competition.

The COAI countered it by saying that such a move would take back the industry to pre-1999 era when most operators were struggling to pay hefty licence fees before a revenue sharing arrangement was brought in.

"It is most ill-advised of the CDMA operator to suggest that the Government should discard a successful formula and revert back to a formula that brought this entire industry to the brink of bankruptcy in 1998," it said.

Meanwhile, CDMA sources said the question that needs to be asked is what kind of spectrum policy is ultimately meaningful for the subscriber, and in the national interest.

"It is our understanding that a Group of Ministers was established by the Prime Minister to go into this important question. There are clearly multiple views on this issue, and the fairest way to deal with this would be for the Group of Ministers to consult all affected stakeholders, and come out with a sustainable policy that is genuinely in the national interest," sources said.

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