The Hindu Business Line : DoT in a fix over spectrum allocation to new players

The squeeze
There is no spectrum in the 900 Mhz band any more
In the 1800 Mhz band, 45 Mhz may have to be kept aside for existing operators
DoT also facing legal challenge on allocation

Thomas K. Thomas

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New Delhi, Feb. 25 Companies aspiring to become pan-Indian telecom operators such as Shyam Telelink, Videocon and Swan may well have to wait longer to realise their plans. With as many as seven new operators waiting to get telecom licences, the Government is now finding it difficult to make available adequate spectrum for all of them.

According to a new report by the Wireless Planning and Coordination wing, there is enough spectrum to accommodate all the seven operators in only four circles of Kerala, Andhra Pradesh, Orissa and Tamil Nadu (including Chennai). This means companies like Shyam Telelink, BPL and Datacom, which have recently got the letters of intent, may get spectrum only in a few select areas even though they have paid entry fee for a pan-Indian licence.

Availability factor

The WPC report categorically says that there is no spectrum in the 900 Mhz band any more. In the 1800 Mhz band it is being suggested to keep aside 45 Mhz for meeting the demands of the existing operators and therefore new operators may get spectrum only in those circles where there is more available radio frequency.

“It may be appropriate to allot the spectrum for the present new LOI holders in the service areas where more than 45 Mhz spectrum is available to meet the requirements of initial spectrum for about nine service providers as well as additional spectrum for existing service providers,” said the WPC note.

The large number of legal cases against the spectrum allocation policy has also compounded the problems for the Department of Telecom. A number of new applicants who were refused letters of intent such as ByCell and Parsvnath have challenged the licensing and spectrum allocation policy.

There are also legal suits filed by Idea Cellular and Spice Telecom against the DoT’s decision to give priority in allocating spectrum to those who paid the entry fee first. The WPC note has expressed concern that if the courts rules in favour of the operators then the Government will be obliged to make available spectrum to these companies as well.

“Once the spectrum is allotted to service providers and some other applicant gets the licence with higher priority as per subsequent court orders, it would be almost impossible to get the spectrum back from earlier allottees for giving to the new ones and this may cause avoidable embarrassment,” the internal note said.

To tide over the spectrum crunch, a DoT committee has suggested that licences be given to only one applicant per circle, to start with, depending on who has fulfilled the entry conditions first.

If this formula is implemented, Datacom, owned by Videocon, will get the licences for 19 circles first.