CDMA cos too must bid for 3G: TRAI

KOLKATA/NEW DELHI: Cracks have surfaced in the recently announced 3G spectrum policy. Telecom regulator TRAI has said the government’s decision to allot third generation (3G) spectrum to CDMA players without an auction is against the principles of equality.

This is because the policy gives CDMA operators ‘one’ slot in the 800 MHz band — the most efficient and cost-effective frequency for CDMA players to offer high-end services — with a rider that the largest operator in a circle would get it. This means Reliance Communications, with the largest subscriber base in all circles, except Delhi and Maharashtra, will be given 3G spectrum ahead of other CDMA players Tata Teleservices, BSNL, MTNL and Shyam Telecom in the 800 MHz frequency band.

DoT currently has 3G frequencies in the 800 MHz to accommodate only one CDMA player. ET has also learnt that it will take over a year for the defence forces to free additional frequencies in the 800 MHz band. This means other CDMA players will have to wait for over a year and the position can change only if there’s an auction. On the other hand, GSM players like Bharti Airtel, Vodafone Essar and Idea Cellular will have to go through a global auction to get 3G spectrum.

Earlier this month, communications minister A Raja had unveiled the 3G policy which would help telecom operators to offer high-end services such as video conferencing, faster downloads of music and movies, interactive gaming and high speed internet.

TRAI chairman Nripendra Misra in a August 8, 2008 communication to DoT secretary S Behura has said: “Since various service providers have been given licences in different service areas at different time periods, TRAI believes that keeping the subscriber base as the criterion for deciding the priority of spectrum allotment shall go against the level-playing field and the principle of equity.”

Additionally, Mr Misra also said RCOM and Tata Teleservices apart, several other players such as BSNL, MTNL and Shyam Telecom have been given the licence to offer CDMA services. “So, the government must take the auction route to allot 3G frequencies in the 800 MHz band for CDMA players as well.”

Further, to drive home the issue’s seriousness, Mr Misra has used firm words to emphasise the need for a review of the policy: “Spectrum in the 800 MHz should be auctioned among applicants with the highest bid price received for the auction of 2.1 GHz spectrum as the reserve price. The subscriber base of the CDMA network of a service provider in any service area is a result of different environments, and cannot muster the test of fairness if it was to become the basis of priority.”

Mr Misra’s communication is likely to come as a major embarrassment to the DoT and communications minister A Raja, since both have been maintaining that the government would provide equal opportunities to all players to bid for 3G frequencies.

“RCOM will have a clear and distinct advantage. Other CDMA operators may have to wait a long time,” said an executive with a private CDMA operator who did not wish to be named.

When it was pointed out that CDMA players had the options of bidding for 3G frequencies in the 450 MHz and 1900 MHz bands, the executive said: “The best band is 800 MHz. Since CDMA players already offer 2G in this frequency, the migration to 3G would be easy. The 450 MHz band is largely for rural India. As for the 1900 MHz band, there is no timeframe when this will be made available. The policy is therefore tailormade for the largest CDMA operator.”

When contacted on the issue, Mr Misra said the regulator had sent its views to the DoT on the recently unveiled policy and added, “We are only saying that allotting 3G spectrum based on the number of subscribers is not feasible. Different operators got CDMA licences at different times and therefore the subscriber base cannot be compared.”

Source : Economic Times