DoT may dump cell licence queue
3 Oct, 2007 - TNN


KOLKATA/NEW DELHI: The rush of mobile licence applications landing at department of telecom’s (DoT) doorstep is likely to impact the expansion plans of Vodafone Essar, Idea Cellular and Spice as well as the GSM ambitions of Reliance Communications, all of whom have applied for 2G spectrum in many circles well over a year ago.

The current policy allocates 2G spectrum to companies on a first-come-first-serve-basis (where Vodafone, Idea and Spice are ranked above all the new applicants). At present, when a licence is allocated for a particular circle, it comes bundled with 2G spectrum.

However, following the slew of applications over the last couple of weeks, the DoT had constituted an internal committee to rework the existing policy norms. DoT sources told ET that this internal committee is ‘most likely’ to do away with the first-come-first-serve clause, and also delink grant of licence from spectrum allocation.

Besides, the DoT committee is likely to recommend that new norms be extended to the pending applications of existing operators (Vodafone, RCOM, Idea, Spice) and not just the new players. Put simply, if implemented, this would mean that the pending applications of the players to expand to new circles will be treated at par with the nearly 375-odd new UASL applications landing over the last couple of weeks. Confirming it, a government source close to the development told ET: “As per new norms, which will be unveiled soon, the license is likely to be delinked from spectrum allocation.

The DoT committee is likely to recommend that this be extended to the pending applications of existing operators also and not just the new players. This issue will also be discussed during the meet between telecom minister A Raja and representatives from the industry in
Delhi on Wednesday.”

A DoT official said a possible solution being considered was to issue a pan-India UAS licence to new applicants on payment of Rs 1,500 crore entry fee, and subsequently ask all players to separately bid for spectrum through the auctioning route. “Existing players who want to expand their operations to new circles may then be asked to bid along with the new entrants. But this is only an option and there is no final decision on this yet,” the DoT source said.

It must also be noted that players such as Vodafone, Idea Cellular and Spice have jointly asked the government (DoT) to treat their pending applications for mobile licenses ‘on a different footing’ by considering them on a ‘top priority’ basis, when compared to other applicants. These players, through their industry association COAI, have told the DoT that the government in the past had already discriminated against them when it announced the UASL policy in 2003.

The new policy allowed FSPs (fixed service providers such as Reliance and Tatas) to migrate to full mobility and also gave them additional advantages as they were placed first in the queue (for spectrum) and had no waiting period, pointed out Vodafone, Idea and Spice in their communication to the DoT.

Another senior government official in the communications ministry said “several high-powered meetings were scheduled this week at the DoT as the government was looking at coming up with a definite set of new guidelines by October 10 to lend clarity to future spectrum allocation norms”.

With regard to TRAI’s recommendation that companies be allowed to offer both CDMA and GSM services under the same license, the government official added: “Any DoT response to a pending application for extra spectrum by an existing GSM licensee or request by an operator to offer access service through a combination of technologies under the same licence will need to be taken keeping the total spectrum availability in mind.”