Ending months of uncertainty over spectrum allocation and new telecom service licences, the department of telecommunications on Thursday resolved the issue by sticking to its first-come-first-served policy. It also issued letters of intent (LoIs) to nine applicants, while rejecting the applications of three firms. Two applications have been put on hold.
According to DoT?s latest decision, existing GSM operators like Idea Cellular, Vodafone-Essar and Aircel would be allocated spectrum first, followed by CDMA players entering GSM services like Reliance Communications (RComm), Tata Teleservices, Shyam Telelink and HFCL and then by new entrants.
With this, communications & IT minister A Raja has met the GSM operators’ demand that they be given priority in spectrum allocation over other claimants. Among existing GSM players, Aircel, Idea Cellular and Vodafone-Essar will receive the start-up frequency of 4.4 MHz for some circles to complete their national footprint, at the existing price based on Rs 1,651 crore for nationwide spectrum.
Besides them, Anil Ambani-led RComm, which currently offers CDMA services, would also get GSM spectrum under the government’s controversial decision of October 19 last year to allow companies to launch cellular operations in both technologies. GSM operators challenged the dual technology decision at the telecom tribunal, TDSat, and also moved the Delhi High Court, but have not received any reprieve so far.
The nine companies issued letters of intent on Thursday include Unitech, Shyam Telelink, Datacom and Shippingstop Dotcom for pan-India operations. S Tel, Spice Telecom, Idea Cellular, Swan and Tata Teleservices were also issued LoIs for a few circles. The applications of HFCL, Parsvnath Developers and Allianz Infratech have been rejected. That of ByCell and Indiabulls have been kept in abeyance pending necessary approvals.
Successful applicants would be asked to deposit the required spectrum fee along with bank and performance guarantees to become eligible for the allotment of spectrum. The companies were issued LoIs on Thursday after DoT intimated to applicants individually its decision to accept or reject their applications. Only applications submitted up to September 25, 2007 have been taken into consideration.
According to DoT officials, the government has enough spectrum to accommodate at least five to six new players after meeting the demands of existing GSM players as well as RComm, which has been permitted to start GSM services under the dual technology clause.