A fresh war is brewing between GSM operators and Reliance Industries, this time over the latter’s plan to offer voice services using broadband spectrum.

The GSM operators’ industry association, representing firms such as Airtel, Vodafone and Idea Cellular, has told the Department of Telecom (DoT) that Reliance’s game-plan is an attempt to enter the voice market through the backdoor.

Nearly 85 per cent of GSM operators’ revenues come from voice calls and an entry by RIL could take away some of that market share. The GSM players had raised similar concerns in 2001, when RIL had entered the mobility space through a fixed telephony licence using CDMA technology.

ISP licence

The fresh battle is over RIL-owned Reliance Infotel’s plans to offer voice services using 4G spectrum. Infotel had acquired broadband spectrum in 2010 under an Internet Service Provider licence.

According to the Cellular Operators Association of India (COAI), Reliance Infotel had the option of taking a unified access licence in 2010 by paying an additional Rs 1,650 crore, which would have allowed it to offer voice services. But the company chose to pick an ISP licence at no additional cost, with the knowledge that the licence did not permit telephony service.

New unified policy

However, now the Government has formulated the new unified licence policy which would allow Reliance Infotel to get into the voice market by acquiring a pan-Indian unified licence for just Rs 15 crore, the COAI said in a letter to the DoT.

The GSM players said this was against the broadband spectrum auction rules of 2010, which stated that the spectrum shall not be used for any activity other than that for which the operator has a licence.

“Introduction of unified licence should not be allowed to be used as a via media to side-step the explicit condition of auction and attain a backdoor entry into voice services,” the COAI said.

Reliance Infotel declined to comment but industry sources said the company has paid Rs 12,848 crore to acquire broadband spectrum, much more than existing GSM players had paid to get unified access licence. Also, the Rs 1,650-crore entry fee for unified access licence was bundled with 4.4 Mhz of GSM spectrum.


(This article was published on January 23, 2013)
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