DoT amends 3G, WiMax policies

NEW DELHI: The Department of Telecom (DoT) on Thursday amended the 3G policy to allow successful foreign bidders to acquire Indian operators without waiting for the mandatory three years.

Another key change in the policy is that CDMA operators will be allotted 3G spectrum through auction. DoT has also retained an earlier clause that besides the existing licence holders only those telcos with experience in providing 3G services can bid for the spectrum.

DoT also amended the broadband wireless access (which includes WiMax services) policy to double the base price for WiMax spectrum to Rs 1,010 crore and allow successful bidders to offer both data and voice services.

While announcing that the 3G spectrum for CDMA operators in the 450 MHz and 1,900 MHz bands would be allotted through auction, DoT said the reserve price for such frequencies would be notified separately. The department also shied away from specifying the licence renewal fee for existing telcos.

The licences of existing telcos would be extended “in a manner as the government deems fit”, it said. Again, while saying telcos must share 1% of their incremental revenues from 3G services as spectrum usage charges, DoT added that the method of calculating this fee would be spelt out later.

ET had first reported all these major changes across different stories over the last 30 days.

In the case of Wireless broadband (WiMax) spectrum, the DoT has doubled the base price for the auction of frequencies on this platform. This implies that any player that wants to bid for WiMax spectrum will now have to offer a minimum of Rs 1,010 crore for a pan-India licence compared to Rs 505 crore earlier.

Industry sources said that with the doubling of the WiMax spectrum base price, successful bidders, including internet service providers (ISPs), would now be permitted to offer mobile services on this platform. This could not be independently confirmed. But while the old policy said spectrum will be auctioned for “data services”, the amended policy has done away with it.

The new BWA policy also adds that radio frequencies in the 700 MHz and 3.3-3.6 GHz frequency bands would be auctioned for WiMax services as and when they become available. The earlier policy said that radio frequencies would be given only in the 2.5 GHz and 2.3 GHz bands for WiMax services.

DoT in its new 3G policy has said that the existing merger norms will apply only to existing licence holders. This implies that foreign telcos, which are successful in their 3G bids, can now buy an existing licence holder without having to wait for three years, the lock-in period specified earlier.

The larger implication is that foreign telcos who bag 3G licences can now buy out existing operators who hold 2G radio frequencies. They will, therefore, be able to offer both 3G and 2G services. Besides, if a foreign player were to bag 3G spectrum and also buy an existing Indian operator, the telco will not have to pay an additional Rs 1,651 crore for the UASL licence.

The government, in its earlier 3G policy announced in August, had decided to allot 3G spectrum in the 800 MHz to the CDMA player with the highest subscriber base, without taking resort to auction as mandated for GSM players.

This was on the condition that the CDMA player would have to pay the same price that the highest GSM operator was paying in a particular circle. This gave RCOM, which has the largest subscriber base in all circles, except Delhi and Maharashtra, the right of first refusal (RoFR) for offering 3G services in the 800 MHz band.

This band is the most efficient and cost-effective frequency for CDMA players to offer high-end services. The change in the policy implies that other CDMA players such as Tata Teleservices, Shyam, BSNL and MTNL as well as new players now stand a chance to get radio frequencies in the coveted 800 MHz band.

Source : Economics Times