Foreign 3G players not suited for India: TRAI cautions FM

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Friday , May 09, 2008 at 1545 hrs Amid a debate over entry of foreign players in 3G telecom services, telecom regulator TRAI has cautioned the Finance Ministry that such a move would have serious implications for the sector in terms of affordability.

"As the Authority firmly believes that allowing participation of new prospective service providers for 3G services, at this juncture, will have serious implications on the Indian telecom sector, you may like to revisit the issues before finalising the Ministry's position on the subject," TRAI Chairman Nripendra Misra said in a letter to Finance Secretary D Subbarao.

In April, TRAI had rejected Department of Telecom's proposal to reconsider allowing foreign players to offer 3G telecom services, saying existing players would be able to roll out network faster.

"As the existing licensees have already made huge investments in infrastructure and their systems are in place, therefore, they will be in a better position to deliver 3G services efficiently at low incremental cost," TRAI had said in its views on Permitting New Entity for 3G Services.

With the number of service providers going up to 13-14 in each circle, the regulator felt there would be sufficient competition to ensure that the spectrum is priced competitively, discourage cartelisation and offer services that are acceptable in terms of quality and price.

Misra has shot off the letter to the Finance Secretary amid media reports that the Finance Ministry was backing DoT's proposal for global auction of 3G spectrum.

DoT had asked TRAI in April to also include other prospective operators with foreign partners who fulfill the conditions for getting Unified Access Service (UAS) licenses.

"The Authority firmly believes that in the interest of the growth of Indian telecom sector, the entry of this kind must be strongly discouraged," TRAI had said in its revised recommendations on 3G services to DoT.