The Hindu Business Line : DoT tightens norms for spectrum allocation

Existing pan-Indian mobile operators, barring Reliance Communication, cannot hope to get additional spectrum soon, as the Department of Telecom has tightened the norms for allocation.

DoT has accepted the telecom regulator’s recommendations to increase the number of subscribers required to be eligible for more radio frequency and to charge a fee from all mobile operators who want more than 10 Mhz spectrum in the case of GSM and 5 Mhz in the case of CDMA operators.

More subscribers

This means if an operator such as Bharti Airtel wants more spectrum in Delhi it will not only have to get more subscribers (actual numbers will be notified later), it will also have to cough up Rs 16 crore per Mhz spectrum. On a pan-India basis Airtel will have to pay Rs 1,650 crore for a chunk of 4.4 Mhz spectrum in all the circles.

While the actual number of subscriber required to be eligible is being worked out by DoT, going by the TRAI recommendations none of the existing operators stand to get any additional spectrum in the near future even if they were ready to pay the fee.

Roll-out obligation

DoT has further tightened the screws by linking the roll-out obligation to spectrum. “No additional spectrum may be allocated to licensees without fulfilling the roll out obligations. In case of spectrum auction, a licensee, who has not met roll-out obligation against an existing licence, should not be eligible to participate in any spectrum auction till the roll-out obligation is met. Any proposal for permission for merger shall not be entertained till the roll-out obligation is met,” said the policy announced by the DoT on Friday.

Almost all the existing operators have defaulted on the roll-out norms. Going by these rules only Reliance, which has got the nod for rolling out GSM service and a few other mid-size companies such as Idea Cellular, Spice and Aircel can hope to get spectrum because they have taken licences for new circles.

No cap

The biggest impact will be on Bharti Airtel and Essar Vodafone, as they already have a pan-India licence. While DoT said that there will be no cap on the number of players in the mobile segment, it is yet to decide on the fate of 575 applications from nearly 46 companies.

DoT said that spectrum will be allocated only when it is available and in case an operator is not given spectrum it will have to fulfil roll out obligations by using wire line technologies.

While GSM operators expressed shock at the policy announcements and were exploring legal options, Reliance Communication welcomed the initiatives and said that the acceptance of TRAI’s recommendation of the enhanced subscriber linked criteria for spectrum allocation will ensure the much needed spectral efficiency and a greater competitive environment.

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