Ahead of the upcoming 3G spectrum auctions, the department of telecommunications (DoT) is working on a policy on drawing up a priority list to allocate 2G spectrum. The matter has assumed significance because the DoT needs to clarify who would first get 2G spectrum ?the successful 3G bidders or the companies whose applications for licences to operate 2G services are still pending before it. Around 343 applications by 16 companies are still pending before the DoT.
An internal DoT note has highlighted the urgency of resolving the issue since companies are insisting on clarity on the matter. The matter has assumed complexity since the government has invited even those foreign telecom operators to bid for the 3G spectrum who are not present in India so far.
While there are some global telecom majors who are interested in entering the Indian market they are hesitant unless clarity on 2G spectrum is not there. This is because with only 5 mhz spectrum, which the government is putting up for auctions for 3G services, is not enough for 3G and 2G services.
?In that scenario one of the offering, data or voice would suffer,? said an industry analyst.
However, incumbent operators stand to gain since they can migrate the 3G customers to the 3G spectrum band thus freeing the 2G band to accommodate more of such customers whose requirement is just the vanilla voice services.
So far the information memorandum brought out by the government is silent on the subject.
Sources said that it?s not easy for the DoT to decide on the issue since the entire matter has got enmeshed in complexities. At the instance of communications and IT minister, DoT had advanced the cut-off date for granting new licences to September 25, 2007 while applications were invited till October 1, 2007. This advancement of the cut-off date has since then been struck illegal by the single as well as division bench of the Delhi High Court. The DoT has recently moved against the verdict to the Supreme Court.
In the meanwhile the DoT referred the matter to the Telecom Regulatory Authority of India to examine whether the pending applications for licences be processed or seeing more than sufficient competition in the sector the number of operators in each circle should be capped. The Trai has currently completed the consultation process on the subject and is in the process of finalising its recommendations.