The government has decided to allow new, global telecom firms who acquire 3G spectrum after bidding to offer 2G services well since it was left with no other option. This is because the department of telecommunications (DoT) and the ministry of finance?s stance of wanting international mobile operators participation in the auction for a greater revenue realisation on one side and the technical hurdles arising out of it on the other side.
As reported by FE earlier, according to the new 3G policy, which the government is likely to announce later this week, would allow such players to offer not only 3G services but also 2G and other telecom services if they are successful in acquiring spectrum through the auction process. This means a company like the US-based AT&T, which applied for a 2G licence last year on October 1 can provide the same service if it is successful in the 3G spectrum bid.
Allowing new telcos had thrown up legal hurdles that foreign players would have to be given a united access service license (UASL) to provide 3G services. Once provided, it would be difficult for the government to stop them from giving 2G services unless some amendment was made, which could then be legally challenged. Also if the government made such an amendment, a technical hurdle would arise; they would not be able to set up 3G networks as 5 MHz spectrum, earmarked for players, wasn?t sufficient to roll out new networks. It would have been enough only for laying an overlay network?over the 2G network?which the existing players alone can do.
The Telecom Regulatory Authority of India (Trai) has all along maintained that only existing service providers should be allowed to bid for 3G spectrum, since it said that allowing new players to bid for the 3G services would result in a further delay of the services being rolled out in the country as was the case in the United Kingdom.
As reported by FE last week, DoT has identified up to 60 Mhz of spectrum for 3G services, which means as many as 12 players can be accommodated in a circle by being allocated 5 Mhz spectrum each. The development is significant since earlier the government was able to identify only 25 Mhz spectrum, which could have accommodated only five players.
Sources told FE that the decision was made after much deliberation since, given the technical and the legal hurdles involved, the government had no choice but to allow foreign mobile operators to participate in 2G, otherwise it wouldn?t be able to allow foreign telcos in the 3G arena from which the government is hoping to generate huge revenues via the auction as it is done in USA and the UK.