The Hindu Business Line : Attorney General wants 3G policy referred to GoM

An open field will benefit foreign players such as AT&T trying to get a foothold in the Indian market. Restricted auction will benefit existing players who will be able to claim higher valuation on any stake sale.

Thomas K Thomas

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New Delhi, June 3 In a move that could further delay third generation (3G) mobile services, the Department of Telecom has been advised by the Attorney General to refer the 3G policy to the Group of Ministers as there is no consensus on the issue of allowing foreign and new players to participate in the auction process.

While the Telecom Regulatory Authority of India (TRAI) is in favour of restricting the bidding to existing licence holders, the DoT wants to open it up to new players also.

New licence category

DoT has been exploring the option of introducing a new category of telecom licences that would enable foreign and new players to bid for 3G (third generation) mobile spectrum.

However, the regulator has cautioned DoT against taking any decision on policy matters without consulting it.

If the policy is indeed referred to GoM, then DoT may be able to push through the proposal as the telecom regulator is not represented in the Group headed by the External Affairs Minister, Mr Pranab Mukherjee.

The Communication and IT Minister, Mr A. Raja, had met the Finance Minister, Mr P. Chidambaram, to garner support for opening up the auction to new players.

TRAI had told DoT that the recommendations of the regulator is required according to existing laws and DoT should keep this in mind to avoid any legal complications.

According to the proposal being considered by DoT, this new class of licence will limit the operator to only 3G services without having any right to claim spectrum for 2G (existing mobile services using GSM or CDMA technologies).

To overcome crunch

This new type of licence is being envisaged to override the crunch in spectrum availability in 2G mobile services, which has forced DoT to stop issuing any more licences in this category.

The Government had recently given 2G licences to about five new players and is now finding it tough to allocate spectrum to all of them in all parts of the country.

However, the current unified access licence conditions does not provide for any new category of operators such as being envisaged by DoT. But at the same time, DoT does not want any more players in the 2G space.

Trai’s concern

Concerned that DoT may override its recommendations by constituting a new category of licence, TRAI has also written to the Finance Ministry explaining its position.

A decision to open up the bidding will benefit foreign players such as AT&T who have been trying to get a foothold into the Indian mobile market.

On the other hand, restricted auction will benefit existing players who will be able to claim a higher valuation on any stake sale henceforth.