The Hindu Business Line : TRAI wants 3G auction limited to existing players

If DoT accepts the regulator’s suggestion then it will shut doors for companies like AT&T which does not yet have a licence to operate in the country.

Our Bureau

New Delhi, April 25 The Telecom Regulatory Authority of India (TRAI) has said that the Government should restrict spectrum auction for third generation (3G) mobile services to existing players only.

TRAI’s suggestion comes after the Department of Telecom sought its views on whether or not to allow foreign and new players to bid for the spectrum by issuing a 3G specific licence.

TRAI in its recommendations said, “The existing licensees due to their available infrastructure are in a better position to deliver 3G services efficiently, quickly and at low incremental cost in the Indian price sensitive market.”

If DoT accepts the regulator’s suggestion then it will shut doors for companies like AT&T which does not yet have a licence to operate in the country. AT&T and other foreign players will then be forced to buy out an existing licence holder. Incumbent players such as Bharti Airtel and Vodafone will, however, benefit from a restricted auction as the level of competition during the bidding will be lower.

“Currently, the UAS licence permits a foreign company 74 per cent foreign direct investment. With 13-14 licensees in each service area, the authority believes that any new aspirant can join hands with the existing licensees,” TRAI said.

DoT had earlier proposed to allow foreign players to bid for 3G by giving them a licence under a new category after payment of Rs 1,650 crore. This new licence, however, would not have made them eligible for 2G spectrum (mobile service currently on offer).

However, TRAI has said that this could be against the telecom policy. “If a new entity is allowed to bid for the spectrum for 3G and it becomes successful in bidding, it will get an automatic right to get universal access service (UAS) licence. This will create legal complications and litigations as it will be construed as an indirect backdoor entry. In case the entity is given only licence and not spectrum (2G) then it will tantamount to creation of new licence category which will be against the NTP 99.”

TRAI said that 3G auction should be done in phases according to spectrum availability. It reiterated that operators who win the auction should be given 5 Mhz each. The regulator added that the Government could review the scenario after three years.

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