The Spectrum Tussle - Cdma V Gsm

[kesav 127]

Spectrum crunch may force DoT to spike fresh LoIs

NEW DELHI: The Department of Telecom is unlikely to consider applications for telecom licenses received between September 26 and October 1 on the grounds of unavailability of radio frequency.

A senior DoT official said nothing will happen to those applications as the department does not have spectrum. Prominent among the companies who applied in this period are US major AT&T and real estate giant DLF, realty company BPTP, Sterlite and Moser Baer.

It also could not be ascertained if DoT will write to these companies asking them to withdraw their applications citing the spectrum scarcity.

Industry sources said since the government had set a cut-off date first till October 1, on legal and technical grounds it cannot ask the companies to withdraw their applications. All it can do is to sit over the applications indefinitely giving the signal of no issuance of LoIs.

As per its decision, DoT will issue to LoIs to 120 applicants applied on or before September 25, 2007.

Recently DoT after after much hiccup started giving spectrum to the new licensees in Tamil Nadu where radio waves are currently available.

source :: http://economictimes.indiatimes.com/News_b...how/2962002.cms

[kesav 127]

Finance Ministry says spectrum price should be 3.5 times higher

The Finance Ministry stated that there are several procedural lapses from DoT pertaining to spectrum fee. A Finance Ministry memorandum places a 3.5 times higher commercial value for spectrum as compared to the fees collected by DoT.

The Finance ministry valuation of the spectrum is based on the growth of the mobile industry in the country. The ministry wants the growth in revenues registered by operators between 2003 to 2008 to be taken into account while calculating the spectrum fees.

According to Finance Ministry estimations, Unitech’s spectrum fees for 22 circles should have been Rs.5805 crore instead of Rs.1658.57 crore collected now. Similarly Datacom’s fees should have been Rs.5273.87 crore instead of the Rs.1506.82 crore collected now.

Last week the CVC had questioned DoT move to not conduct 2G spectrum auctioning. Also even the PMO is reported to be following the case now as the government seeks to increase revenues from fee collection to fund other projects.

source :: http://www.telecomtiger.com/fullstory.aspx...mp;storyid=1614

[kesav 127]

Govt announces telecom licenses M&A norms

The Government today said that no mergers and acquisitions of telecom licenses would take place if the number of service providers reduce below four in a circle consequent upon the M&A.

Announcing the guidelines for mergers and acquisition of telecom licenses in a circle, the Department of Telecom (DOT) in a statement here, said that its prior approval for the M&A of the licenses is necessary and the combined market share of the merged entity shall not be greater than 40 per cent in terms of subscriber base or in terms of revenue.

Following the merger, the entity shall be entitled to the total amount of spectrum held by the merging entities, subject to the condition both the licensees will meet within three months from the date approval of merger by DOT.

source :: http://www.business-standard.com/common/st...mp;autono=36045

[kesav 127]

Here is the official link.......

http://www.dot.gov.in/M&A%20Guidelines...2022-4-2008.pdf

[kesav 127]

After TamilNadu, now its turn of Orissa.

DoT awards spectrum to 5 new players in Orissa.

After gaining their telecom licenses in Tamil Nadu, Venugopal Dhoot-promoted Datacom Solutions, Aditya Birla group company Idea Cellular and the BPL group company promoted Loop Telecom have been allocated 4.4 MHz of GSM spectrum each by the Department of Telecommunications (DoT) to start operations in Orissa. The DoT has also allocated spectrum to Nahan Properties (part of the Unitech group) and S-Tel in the state.

According to sources, the DoT is expected to issue the new players start-up spectrum in Karnataka, Andhra Pradesh, Kerala, Maharashtra, Orissa and Bihar as all of these circles (or service areas) have surplus spectrum available.

Orissa currently constitutes almost 18 per cent of the total all-India subscriber-base with just under 4 million GSM subscribers. At the moment there are only four telecom players in the state.

On April 15, the DoT cleared the release of 22 MHz to five new telecom licensees in Tamil Nadu. Datacom Solutions, Idea Cellular, Unitech group, Swan Telecom and Loop Telecom. The companies were allocated 4.4 MHz of spectrum each to start operations.

Meanwhile, in another development, Reliance Communication, part of the Anil Dhirubhai Ambani group, was allotted CDMA spectrum for the North Eastern states and Assam. With this the compnay has been allocated spectrum in all the circles across the country in CDMA. Earlier this month, Tata Teleservices was allocated CDMA spectrum in three circles — North East, Assam and Jammu and Kashmir. Later, Sistema had also received radio frequency for the same areas.

In January 2008, three cellular operators — Vodafone, Airtel and Idea Cellular — were issued universal access service licences, which allow them to offer both CDMA and GSM mobile services.

source :: http://www.business-standard.com/common/st...mp;autono=36082

Orissa people should be happy that they've 5 new GSM players with spectrum.

[@ksh@T 20]

NEW DELHI: The Government said on Tuesday that no mergers and acquisitions of telecom licenses would take place if the number of service providers reduce below four in a circle consequent upon the M&A.

Announcing the guidelines for mergers and acquisition of telecom licenses in a circle, the Department of Telecom (DOT) in a statement here, said that its prior approval for the M&A of the licenses is necessary and the combined market share of the merged entity shall not be greater than 40 per cent in terms of subscriber base or in terms of revenue.

Following the merger, the entity shall be entitled to the total amount of spectrum held by the merging entities, subject to the condition both the licensees will meet within three months from the date approval of merger by DOT.

[@ksh@T 20]

Telcos to seek clarifications on new merger norms

NEW DELHI: The government, read the department of telecom (DoT), may have a lot of explaining to do over its merger norms announced on Wednesday. This comes as the telecom industry association—Cellular Operators’ Association of India (COAI)—is set to meet DoT to seek clarity on several ‘grey areas’.

First, sources said that operators want DoT to clarify if the minimum period of three years, which a licensee must complete before it can contemplate merger, applies only to the new entrants, or even to existing operators, in the circles where they got new licences recently.

This is because, if this clause were to apply across-the-board, several existing players such as Idea, Aircel, Spice and Vodafone Essar, who were recently awarded licences in many circles, can’t go in for mergers in these zones. This implies, an existing licensee can’t acquire Idea, Aircel, Spice and Vodafone in the circles where they recently bagged licences.

“Telcos are scheduled to meet shortly through the industry associations— COAI, the body representing GSM players, and the Association of Unified Service Providers of India (AUSPI). They will seek clarifications on several issues including details on spectrum transfer fees and why a pre-approval is required for any merger,” an industry executive told ET. “The industry feels that DoT will be required explain several issues, especially if the guidelines will apply in the case of an acquisition,” the executive added.

When contacted by ET, executives with two telcos also said that they would also seek changes to certain guidelines — pre-approval for the merger clause and the three-month time frame by which operators would have to return extra spectrum in case of a merger.

“Pre-approval for any deal cannot be obtained as talks between companies are conducted at the highest levels of secrecy. As per law, if the DoT were to be informed of this, then the same information must also be provided to the markets (SEBI). This, in turn, violates the ‘non disclosure agreements’ or confidentiality agreements that two companies enter into when they are in talks for a merger. The other dimension is that, in most occasions, as in the case of the Hutchison-Vodafone deal, several players were in the running and each of the companies cannot therefore obtain pre-approvals,” explained an executive with a top telco.

An executive with another operator pointed out that telcos would also tell the DoT that post-merger entity being asked to return excess spectrum within a period of three months was not technically feasible.

“The network deployments of the acquired/merged operators will be based on the existing spectrum allotments. Global examples have shown that when telcos surrender spectrum, it takes between 12 - 24 months for the service provider to migrate subscribers on that frequency,” the executive added.

Industry sources also said that telcos would propose an alternate framework where the DoT works out a mechanism to charge operators for this excess spectrum until they reach the subscriber-linked eligibility criteria for holding on these frequencies.

[kesav 127]

Why is TATA not allocated GSM spectrum in Orissa?

:confuse:

DoT yet to respond to CVC queries

The Department of Telecommunications (DoT) is yet to furnish its replies to the queries posed by the Central VigilanceCommission (CVC) in January on additional spectrum allocation to telecom firms.On the sidelines of a BSNL conference,vigilance commissioner Ranjana Kumar said, "We haven't got all the replies from DoT yet."

She refused to comment further on the controversial spectrum issue, saying, "We (CVC) are in an ongoing dialogue with DoT." When asked about the deadline for getting all the responses, the vigilance commissioner refused to give a date.

In January, the commission, in a letter to the DoT, had sought replies to several queries related to spectrum allocation to telcos.

At that point, CVC had given January 24 as the date for DoT to furnish replies.Ranjana Kumar said, "Our purpose is not to impose penalty. We want to strengthen the system so that there's no misuse (of resources)."

source :: http://sify.com/finance/fullstory.php?id=14655952

[kesav 127]

@ksh@T,

Kindly post 2G related information(regarding spectrum, license,M&A guidelines etc.,) in "The Spectrum Tussle - Cdma V Gsm" thread.

It would be helpful to track the movement of regulation and industry clearly at one level.

Hope you appreciate the intention.

Admins,

Kindly merge the topic with the said thread.

Edited April 26, 2008 by Honest
<< Topic Merged >>

[@ksh@T 20]

DoT allots additional spectrum to Bharti with rider on pricing

NEW DELHI: The government has allocated additional radio frequency 2 MHz to Bharti Airtel in Tamil Nadu but with a rider that it would be subject to pricing of spectrum beyond 6.2 MHz which is under consideration, whereas there is no such condition for the new telecom operators.

Allocating additional spectrum of 2 MHz, the Department of Telecom (DoT) said that the additional allotment of spectrum is subject to revised pricing as and when finalised and is also to subject pending court order.

Reliance Communication has filed a petition in the telecom tribunal TDSAT saying that GSM operators have been given spectrum beyond the contracted quantity of 6.2 MHz and the extra radio frequency held by them should be returned so that the same could be distributed to new players.

No decision has been taken by the TDSAT as yet. Communication and IT Minister A Raja has already asked the Telecom Commission to review annual spectrum charges being paid by service providers as license fee. According to sources, DoT is likely to raise the charges to a minimum of eight per cent beyond 6.2 MHz and a final decision in this regard is expected soon.

Government has been allocating spectrum to the service providers based on subscriber-linked criteria as suggested by the telecom regulator TRAI and going by that most of the existing GSM players have more than 6.2 MHz in various circles.

Sources said that the operators may be asked to pay higher spectrum charges beyond a particular level and in case the total quantity goes up to 10 MHz the DoT may levy charge of 10 per cent of firm's revenues.

[kesav 127]

Department of economic affairs for hike in spectrum fee

NEW DELHI: In what could be a rude shock to telcos, the department of economic affairs (DEA) had told department of telecom (DoT) that the communications ministry’s proposed increase in spectrum fee is too low. The DEA has asked DoT to hike the spectrum fee even further and impose flat rates across circles, which is against the current policy where the spectrum fee is based on the quantum of the radio frequencies held by the telco.

The DEA has sought that the DoT change spectrum usage charges levied on telecom companies to a fixed percentage of revenues for each category of circles (licensed service areas congruent with metros and states in the case of the major states). At present, the percentage of revenues payable as spectrum usage charges varies with the quantum of spectrum allotted to a telco, regardless of the category of circle in which the telco operates. The basis for allocation of spectrum would continue to be the number of subscribers accumulated by a telco.

The DEA wants spectrum usage charges to be based on the licence-fee model, where telcos pay a stipulated share of the revenue based on the circle of operation. Telcos pay 10% of their revenues as licence fee in metros and category ‘A’ circles, 8% in category ‘B’ and 6% in category ‘C’ circles.

On a similar basis, the DEA wants telcos to pay a flat 8% of their revenues as spectrum fees for all the four metros and in the eight category A circles, 6% in all the category B circles and 4% in the category C circles. The DEA proposal if accepted by the DoT, the will the hike the government’s collection from spectrum fees by several thousand crores.

At present, if a service provider has 4.4 MHz of spectrum in any circle, the operator must share 2% of their revenues with the government towards spectrum usage charges. For 6.2 MHz of radio frequencies, the spectrum charge is 3% of the total revenues, for 8 MHz and 10 MHz it is 4% and for 12.5 MHz it is 5%. In case any telco gets 15 MHz of radio frequency per circle, it must pay 6% of its revenues towards spectrum charges.

However, the DoT has proposed that this be hiked significantly—as per the department’s proposed model, it wanted to hike the spectrum charges to 3% of the company’s revenues if the firm held radio frequencies of up to 4.4 MHz, to 4% for allotments between 4.4-6.2 MHz, to 5% if telcos have between 6.2-7.2 MHz of radio frequencies, 6% for 8.2-9.2 MHz, 6.5% for 9.2-10.2 MHz, 7% for 10.2-11.2 MHz and 7.5% for allotments between 11.2-12.2 MHz.

The DoT’s proposed charges were higher than those recommended by sector regulator Trai, which in August 2007 had proposed that spectrum charges be increased to 5% of the total revenues for up to 10 MHz of radio frequencies, 6% for 12.5 MHz, 7% for 15 MHz and 8% for if an operator held more than 15 MHz in any circle. The DEA’s model is even higher than the DoT’s formula.

Now, its turn of DEA to stir up the already dirty pond.

The flat rate model will have advantage of being technology neutral and its also purely paid on the revenue which company earns in that sense it would help new operators with less burden.

source :: http://economictimes.indiatimes.com/News/N...how/3026278.cms

[@ksh@T 20]

CDMA cos oppose flat circle rates

NEW DELHI: CDMA operators, such as Reliance Communications and the Tatas, have opposed a joint plan from the Department of Telecom(DoT) and the Finance Ministry to rework the current methodology for calculating spectrum charges and replace it with flat rates across circles. At present, the percentage of revenues payable as spectrum usage charges varies with the quantum of spectrum allotted to a telco, regardless of the category of circle in which the telco operates.

Earlier this year, the DoT and the finmin after several rounds of consultations had proposed to change spectrum usage charges levied on telecom companies to a fixed percentage of revenues for each category of circles (licensed service areas congruent with metros and states in the case of the major states).

Under this model, telcos will pay a flat 8% of their revenues as spectrum fees for all the four metros and in the eight category A circles, 6% in all the category B circles and 4% in the category C circles. The logic being that this methodology will hike the government’s collection from spectrum fees by several thousand crores.

However, while both the DoT and the finmin have agreed to consider this new methodology, the government has so far not announced any policy decision on moving towards a circle based spectrum fee. CDMA operators have told the DoT that a uniform spectrum fee, based on the circle of operation, would be unfair to telcos on this technological platform, promote inefficient utilisation of radio frequencies and also skew the level playing field.

“Such an approach would not only discourage the efficient use of spectrum but would also be against the interests of the new operators, the CDMA operators and also against the principle of paying more for more usage,” the Association of Unified Service Providers of India (AUSPI), the industry body representing CDMA operators said in a communication to the DoT.

According to Indian regulations GSM and CDMA operators are allotted radio frequencies in the 2:1 ratio as the latter is considered more spectrum efficient technological platform. AUSPI has also argued that since CDMA operators, are only allocated half the spectrum when compared to their GSM counterparts, the DoT-finmin proposal, if implemented, shall effectively mean that the CDMA operators shall be charged double the spectrum fee for equivalent spectrum allocated to the GSM operators.

At present, if a service provider has 4.4 MHz of spectrum in any circle, the operator must share 2% of their revenues with the government towards spectrum usage charges. For 6.2 MHz of radio frequencies, the spectrum charge is 3% of the total revenues, for 8 MHz and 10 MHz it is 4% and for 12.5 MHz it is 5%. In case any telco gets 15 MHz of radio frequency per circle, it must pay 6% of its revenues towards spectrum charges.

CDMA operators want this system to continue and said: “The spectrum and its value is the same throughout the country and fixing different charges for allocated spectrum based on categorisation of service areas does not have any logic or rationale and would only discourage the new entrants who will face stiff competition from the existing operators. The graded system of spectrum usage charges has worked very well and is based on the logical principle of paying more for more spectrum.”

[srk006 21]

New telcos get GSM spectrum in Andhra Pradesh

Various new players including Videocon-promoted Datacom, realty major Unitech, Swan Telecom and Loop Telecom have been given start-up GSM spectrum of 4.4 MHz in the Andhra Pradesh circle, sources said.

Source: http://economictimes.indiatimes.com/News/N...how/3066499.cms

[Honest 836]

Spectrum allocation norms don't match world standards: Arun Sarin

30 May, 2008, 2123 hrs IST, PTI

NEW DELHI: British telecom giant Vodafone has said that norms followed by India in allocating scarce spectrum did not match world standards and actually appear "unusual."

"The way the spectrum (radio frequency) has been allocated is slightly unusual by world standards," Vodafone's outgoing CEO Arun Sarin told a news channel.

The government has issued as many as 120 new licenses in the mobile telephony space and has also started allocating start-up spectrum to new players.

"We have been given some spectrum and others too have been given. But the fact is that we need more spectrum and whether we get it from government or from the new players who have been given licensees is to be seen," he said.

To a query that what could be the reason for him to announce his retirement at this juncture, Sarin said it was a matter of his tenure coming to an end. He did not respond to whether he was joining any other company after two months.

India-born Sarin, 53, who was only in April named the most influential businessperson in British technology and telecom space for overcoming shareholder dissent and making Vodafone the largest mobile service provider, has led the company for about five years.

Sarin, who would step down as CEO on July 29 after the annual general meeting, has been associated with a number of strategic initiatives taken by the company. The last that involved a significant size being the multi-billion dollar buy last year of Hutchison Essar, then India's fourth-largest mobile operator.

He said the Indian government will have to make more spectrum available if it has to achieve its teledensity targets of 500-700 million subscribers in next 5 to 7 years.

Vodafone (erstwhile Hutch-Essar) is the third largest mobile operator in India.

[@ksh@T 20]

DoT to allow non-licencees to bid for 3G spectrum

NEW DELHI: The government has proposed to issue fresh licences to successful bidders in the auctioning of spectrum for 3G mobile services, a move that could increase competition and bring additional revenue to the exchequer.

According to Draft Guidelines for Auction and Allotment of spectrum for 3G services, Department of Telecom has said that "the successful bidder would get spectrum (radio frequency) allotment for 3G services for a period of 20 years.

"Successful bidders who are not licencees should be given a Unified Access Service (UAS) licence," DoT said.

This paves the way for foreign and new players, besides existing 2G service providers like Bharti, Vodafone and Idea to participate in the auctioning process. Telecom regulator TRAI had strongly opposed the participation of foreign players.

If the guidelines are finalised in the current shape, as many as 342 aspirants, including AT&T, DLF and Deutsche Telecom-MoserBaer who failed to get new telecom licences in the last round, may get to bid for spectrum for launching next generation (3G) mobile services.

According to sources, DoT fears that if only foreign players, who do not even have a licence, were allowed to participate in the 3G process, existing applicants may go to court and delay the entire process.

Many developing countries have allotted 3G spectrum to existing 2G licence holders. In UK, open 3G auctions in 2001 got large revenues but the roll-out was delayed for many years, a situation DoT would not like to see here.

Communication and IT Minister A Raja had recently said that additional players may be allowed to participate in 3G spectrum auction, and additional players may not necessarily be the foreign players.

According to DoT, auction will be for five blocks, each of 2x5 MHz of spectrum in each circle in the 2.1 GHz band and each participant can take only one block. Currently, there are 10-12 players in each circle.

Players with stand alone 3G spectrum of 2x5 MHz of spectrum may not be able to offer quality services as the quantity may not be sufficient to roll out 3G network, sources said.

According to DoT, International Competitive Bidding would require certain eligibility conditions for new players which would include experience of providing mobile services. Some existing 2G licensees do not have this experience, as this is not a criteria for giving licenses, and thus may resort to legal action.

Sources said that a decision is yet to be made on whether 3G spectrum auction should be done only among existing licensees or additional Indian/foreign prospective service providers fulfilling certain eligibility criteria should be allowed.

"If a non-licence holder gets 3G spectrum on the basis of auction, it will be given a licence. There are 342 applications pending for grant of licence on first come-first served basis. These applicants may also go to court and delay the process," sources said.

[Honest 836]

TDSAT turns down plea by Spice to stay spectrum allocation

6 Jun, 2008, 2114 hrs IST,

NEW DELHI: Telecom tribunal TDSAT on Friday refused to stay the allotment of spectrum to new entrants saying that the process could not be stalled considering larger public interest.

The TDSAT turned down the plea of B K Modi-promoted Spice Communications which has pleaded that since tribunal would not be sitting for a month on account of summer vacation, it should stay allotment of spectrum till July 3, next date of hearing.

"Yes I agree with your points ... but spectrum could also be utilised for larger public good also. It has involved larger public interest also," said TDSAT Chairman Justice Arun Kumar.

Spice, which has challenged rejection for pan-India GSM licence by government, strongly pleaded to stay the spectrum allocation process contending that it may neutralise its commercial growth.

The BK Modi firm submitted before the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) that if the tribunal order goes in its favour then by that time all the market would be captured by the new entrants.

"Nothing would be left for us. We would be commercially ruined. Our competitors would go before us and capture the market. They are already raising infrastructure," submitted the counsel appearing for the GSM service provider.

He also submitted that the Department of Telecom (DoT) arbitrarily rejected its application on the networth issue and kept it out wrongly from a self-defined term.

This was opposed by government through Additional Solicitor General on the ground that the petition filed by Spice was not maintainable.

[Honest 836]

No spectrum for Mobile Virtual Network Operators: Govt

16 Jun, 2008, 1552 hrs IST, PTI

NEW DELHI: Mobile Virtual Network Operators that intend to enter the domestic mobile space will not be allowed to own spectrum, TRAI Chairman Nripendra Misra said on Monday.

"Mobile Virtual Network Operators will not be allowed to have spectrum of their own," he said while talking to reporters after TRAI's Open House today on the matter.

Globally MVNOs purchase of air-time on wholesale basis from the mobile network operators (MNO) and then use it to provide services to customers through their own brand.

Following the global practice, MVNOs entering India would be able to foray into the mobile space without owning any infrastructure or spectrum but by buying air-time from MNOs.

Misra added that there would have to be a lock-in period for the MVNOs along with a security amount, which would be forfeited incase the company plans to exit business before the stipulated lock-in period.

MNO had earlier conveyed it to TRAI that the definition of MVNOs as suggested by the regulator need to be changed to rule out any sharing of spectrum between them and MVNOs.

In its consultation paper telecom regulator Trai has said: "MVNO licensee is an entity that does not have an assignment of spectrum for Access Services (2G/3G/BWA) but can provide wireless (mobile) Access Services to customers by sharing the spectrum of the Access Provider".

In their response to Trai's suggestion all the major operators Bharti, Reliance Communications and BSNL had sought changes in the definition of an MVNO. The operators said an MVNO does not have an allocation of spectrum neither does not have its own radio frequency.

The operators want commercial arrangement between MVNOs and mobile operators' for providing the telecom services to end user, which is the essence of any MVNO's business.

[Honest 836]

DoT forms committee for 2G spectrum allocation, pricing

17 Jun, 2008, 1803 hrs IST, PTI

The committee is be headed by Subhod Kumar, Additional Secretary, DoT and has other senior officials from the department besides professors from IITs, IIMs, sources said.

The terms of reference of the committee, formed yesterday for submitting recommendations to the government, are to assess the demand of spectrum for GSM, CDMA and 3G based on projected growth of the Indian telecom sector and availability of the radio waves.

The committee is also expected to recommend steps to bridge the gap between availability and demand of spectrum by re-farming and other technological and innovative methods.

It would also suggest ways for spectrum transfer charges in case of mergers and acquisitions and other cases involving effective use of spectrum of one licensee by another through transfer, sub-licensing and any other means. The other terms of reference are to suggest methodology to be followed for allocating spectrum for access services and rewarding players for efficient use of radio waves and penalising them for poor use.

The 2G spectrum allocation process has seen considerable controversy with some operators saying, beyond the start-up (4.4 Mhz in case of GSM) operators should pay for additional spectrum. GSM players said they have already paid substantial amount for the given spectrum.

Earlier, the government had formed a panel to review the 2G spectrum allocation criteria. It had set up another committee to review the subscriber-linked spectrum allocation criteria specified by the Telecom Engineering Centre (TEC).

The move came after existing GSM operators criticised TEC's report, which asked operators to pack in more clients before becoming eligible for additional spectrum.

The report had put out all existing operators out of contention for additional spectrum.

[Honest 836]

Defence spectrum for civilian use likely soon: Pallam Raju

21 Jun, 2008, 0946 hrs IST

NEW DELHI: National Security Adviser MK Narayanan is to adjudicate on the sensitive spectrum issue that could see the defence forces vacating idle radio frequencies for civilian communications like mobile telephony, Minister of State for Defence Pallam Raju has said.

"Our national security cannot be compromised. But we also know that spectrum is scarce. We must do what is best for the nation," said Raju, who was dealing with the subject as the chairman of the Parliamentary Standing Committee on IT and Communications between August 2004 and January 2006.

"Some form of an MOU (memorandum of understanding) is being looked at by the NSA (national security advisor), which can be signed between the ministry of defence and the DOT (Department of Telecommunications)," the minister told IANS in an interaction.

"I guess it will be soon... In a couple of months," he replied, when asked when the NSA will be able to find a solution.

A group of ministers, headed by then defence minister Pranab Mukherjee, had given Narayanan the mandate to find a way out to get idle spectrum with the forces vacated, while also finding a secure alternative and the funds to finance the same.

Raju, who holds a bachelor's degree in engineering and a master's in business administration from the Temple University in Philadelphia, said the defence ministry was not averse to vacating some of the spectrum allotted to it.

He nevertheless maintained that the DOT and other agencies of the ministry also have to come out with the funds that will help in creating an alternative platform for the defence forces that is secure.

"It is important for the DoT to understand this and come out with solutions to create an alternative platform," he said.

"The Universal Service Obligation Fund could be used for this," the minister said, referring to the money which private sector telecom operators pay state-run telecom companies to ensure communications services in rural areas.

"I cannot understand why it is taking so much time," added Raju, who has worked in the US and Norway before being inducted into politics by late prime minister Rajiv Gandhi. Raju's father M.S. Sanjeevi Rao was a minister in Gandhi's cabinet.

With India adding 8-10 million new mobile telephone subscribers to the network each month and gearing up for next generation telephony in 2009, radio spectrum availability has become a hot issue.

There are more than 500 applications from private companies pending before the government for allocation of frequencies.

Even the industry watchdog, Telecom Regulatory Authority of India (TRAI), has not been allowed to make any recommendation in this regard, even though frequency allocation has been the most contested subject by private telecom operators.

"Spectrum management and licensing are not in our domain at all. It is entirely and exclusively in the domain of the government and its departments," watchdog chairperson Nripendra Misha said.

[Honest 836]

Defence-telecom ministry pact over spectrum vacation on anvil

26 Jun, 2008, 1750 hrs IST, PTI

NEW DELHI: An agreement between Ministries of Defence and Communications, to chart a roadmap for the armed forces to vacate radio frequency for the use of mobile communication, is on the anvil, Junior Defence Minister M M Pallam Raju said on Thursday.

"We are in the process of making the Ministry of Defence and the Ministry of Communications sign an Memorandum of Understanding on this issue," Raju said, after inaugurating a workshop on WiMAX organised by Assocham and the WiMax forum.

He said the MoU would layout the process of vacating spectrum from the defence forces besides specifying the alternative networks using different spectrum bands and the time-frame for vacating the radio waves.

"The national security advisor is facilitating the whole process," the minister added.

He also said that the government cannot afford to compromise with national security and the alternative communication system of defence has to be very reliable. "It depends on how quickly we get the alternatives as it wouldn't be fair to deny our people the kind of services that new technologies like 3G or WiMAX offers," he said.

Raju added that the defence would vacate the much-awaited spectrum very soon, but did not give any timeframe for it.

"Spectrum will be vacated very soon," he said. This would help India witness a plethora of communication services based on 3G and Wi-MAX technologies.

BSNL is currently working on an alternative fibre network which would enable the defence forces to vacate 45 Mhz of spectrum for use by commercial cellular service providers.

The PSU had prepared the network for Airforce and Navy and was later told to modify it as per their needs.

[Honest 836]

User-based spectrum norms may be junked

30 Jun, 2008, 0000 hrs IST

NEW DELHI: India may soon junk the subscriber-based spectrum allocation criteria. Currently, India is the only country in the world that allocates radio frequencies to telecom operators based on their subscriber base.

Sources said that India may do away with this system as the committee set up by the communications ministry to come out with a new policy for spectrum allocation is ‘keen’ to evaluate various alternate methods.

The committee’s recommendations, which are expected to be released within couple of months, will be followed for all-additional or incremental-spectrum allocation to existing players.

Some members of this committee ET spoke to said that going forward, it would not be possible for India to continue with the subscriber-linked spectrum allocation policy, due to a slew of factors, including the ‘limited availability of radio frequencies’.

They also added that the committee would examine various models while adding that a possible option would be a ‘combination approach’, where telcos would become eligible to participate in auctions for radio frequencies subject to them reaching certain specified subscriber targets.

This committee, which consists of representatives from the DoT’s wireless co-ordination and planning arm, regulator TRAI, Telecom Engineering Centre (TEC), cellular industry, scientific community and other government agencies, is expected to have its first meet shortly.

This committee was set up in December 2007, after a government panel (with industry representatives), which was given the task of specifying the subscriber base that telcos should have to get additional spectrum refused to take a call on this issue.

Another reason why the subscriber-linked spectrum allocation norms may be done away with is because these have also been subject to intense controversy. The issue began last year when telecom regulator TRAI recommended that both GSM and CDMA players increase their subscriber base between 2-6 times (depending on the circle) to get additional spectrum.

With GSM operators going to court on the issue, the DoT asked the TEC, its technical arm, to come up with new norms. The TEC in turn suggested that GSM players increase their subscriber base up to 15 times before being given additional radio frequencies.

With operators refusing to accept the TEC report, the DoT was forced to set up yet another official panel with industry representatives to pacify the GSM players. But this panel, in its final report shied away from its primary mandate of studying the TRAI recommendations and TEC report, and specifying new subscriber-linked allocation norms.

The panel said that it could not come up with a new subscriber linked radio frequency allocation formula as there were ‘sharp divisions between its members’ on this issue.

It is also learnt that the committee will consider an auction approach, where operators are given a minimum allotment along with the licence and all further allotments would be via a bidding process. Sources also added that the committee would soon invite cellular industry bodies, Cellular Operators Association of India and the Association of Unified Service Providers of India—to present their views on this issue.

Until the committee comes out with a new policy approach, the government is following the criteria specified by telecom regulator TRAI which said that both GSM and CDMA players increase their subscriber base between 2-6 times (depending on the circle) before being granted additional spectrum.

Additionally, in this interim period, GSM operators will be given additional spectrum in tranches of 1 MHz, as against the earlier norm where they are given additional radio frequencies in blocks of 1.8-2.2 MHz.

[KumaarShah 143]

Spectrum panel to meet on July 14 to discuss price, allocation

3 Jul, 2008, 1759 hrs IST, PTI

NEW DELHI: A panel formed by the Department of Telecom to recommend methodology including a suitable auction mechanism for the allocation and pricing of second generation (2G) spectrum for mobile services would meet on July 14.

2G Spectrum pricing and allocation has seen considerable controversy between DoT with TRAI, Finance Ministry and operators. A DoT official said the panel main task is to work out a practical, revenue-generating and amicable solution on these two issues.

The panel, headed by DoT's additional secretary Subodh Kumar is expected to recommend an appropriate auction mechanism for additional spectrum, said a DoT circular. Telecom engineering Centre which had drawn up the subscriber threshold limit for acquiring spectrum beyond 4.4 MHz is also a member of the committee.

DoT and Finance Ministry have been at loggerheads over pricing spectrum with the latter wanting higher charges. The Finance Ministry has been pushing for auctioning 2G spectrum on the grounds that the price formula suggested by DoT was based on spectrum charges decided in 2003.

It has concluded that for a pan-India operator, the circle fee fixed at Rs 357 crore per MHz should be inflated by a multiple of 3.5 times reflecting the growth in revenue per MHz between 2003 and 2008.

The DoT recently allocated 120 universal access service licences (UASL) for Rs 8,986 crore. The Finance Ministry has placed the real value closer to Rs 31,452 crore.

DoT, on the other hand, is convinced that the fee structured proposed by it would raise more than Rs 10,000 crore for the national exchequer. It also cites legal problem in going for auctioning 2G spectrum which would require license guidelines modifications.

Source: The ET

Note to Mods/Admins: If this post can be shifted to an existing topic, please move it.

[Honest 836]

CDMA companies want rivals to pay for ‘excess’ spectrum

4 Jul, 2008, 0000 hrs IST

NEW DELHI: After a lull, the spectrum wars between GSM and CDMA players are set to kick off again.

CDMA operators, through their industry body—Association of Unified Service Providers of India (AUSPI)—have made presentations to the finance ministry and communications ministry and have also approached the Prime Minister’s Office (PMO) and sector regulator TRAI demanding that GSM players be charged Rs 1,312 Crore per MHz for all radio frequencies they hold in excess of 4.4 MHz. CDMA operators have also added that this would bring in revenues to the tune of Rs 10,000 crore to the government.

Interestingly, the CDMA players’ proposal is largely in line with a model worked out by the finance ministry. The only difference is that the finance ministry had wanted this Rs 1,312 crore /MHz formula to be applicable to both new entrants as well as the existing players.

The finmin had wanted new entrants who had paid Rs 1,651 crore entry fee, which guarantees them 4.4 MHz of GSM spectrum, to shell an additional Rs 4,121 core based on its model. The finmin had also added that this fee must be applied to all existing GSM telcos from the time their spectrum capacity crossed 6.2 MHz limit. On this basis, several leading GSM players will have to cough up an additional Rs 3,000 crore as some telcos hold up to 10 MHz of radio frequencies.

The finance ministry has arrived at this figure as follows: The Rs 1,651 crore fee fixed in 2001, entitles 4.4 MHz of start-up spectrum, which works out to Rs 375 crore per MHz. At the same time, the fin min had estimated that telcos’ aggregate gross revenues (AGR) have increased by about 3.5 times and therefore the spectrum fee should be 3.5 times of Rs 375 crore which works out to Rs 1,312 crore for every MHz.

AUSPI, in its presentations, have argued that an additional fee of Rs 1,312 crore should be applied for all spectrum held above the 4.4 MHz limit and not 6.2 MHz as being proposed by the DoT and the finmin. Their logic: An Indian telecom licence entitles GSM players to only 4.4 MHz of spectrum. The industry body has also endorsed the finmin view of using the AGR factor when calculating the spectrum fee to arrive at the Rs 1,312 crore/MHz figure.

“We feel that the government will be benefited to the extent of more than Rs 10,000 crore as one-time levy for the already allocated spectrum beyond the contracted value,” the AUSPI presentation said.

[Honest 836]

DoT to charge fixed amount for spectrum beyond 6.2 MHz

6 Jul, 2008, 1351 hrs IST, PTI

NEW DELHI: Government's proposal to allow existing GSM operators keep extra spectrum lying with them after levying a one-time fee may actually cause a revenue loss of Rs 10,000 crore annually to the exchequer, say industry sources.

According to sources, the Department of Telecom is considering to charge a fixed amount for spectrum beyond the prescribed 6.2 MHz held by some of the leading mobile operators.

Communications and IT Minister A Raja, who met Prime Minister Manmohan Singh last week, is understood to have briefed him about the proposal.

According to sources, the government gave the approval for one-time pricing beyond 6.2 MHz of spectrum (radio frequency) in terms of enhancing the spectrum fee by 1 per cent more of adjusted gross revenue (AGR) of a cellular operator.

Cellular operators having beyond 8MHz of spectrum will be required to pay two per cent more of the AGR, sources said. These proposals would now be discussed by the Telecom Commission, a decision making body of the DoT, before being implemented.

When contacted, some of the new mobile operators and a few CDMA players criticised the proposal saying if implemented, this would leave no room for them to expand their services in future in view of scarcity of spectrum.

A CDMA operator had earlier demanded that the extra spectrum held by mobile operators beyond 6.2 MHz should be returned immediately or it should be priced appropriately.

As per a DoT policy, the start-up spectrum has to be given in a tranche of 4.4 MHz, but in many cases it has allotted 6.2 MHz. Most of the existing GSM players have been allotted 10 MHz or even higher in some of the circles based on the number of subscribers, as decided earlier.

CDMA operators had earlier raised the matter with the DoT over what they call an in discriminatory approach of allotting extra frequency to GSM players.

However, with sharp differences between the various players on how extra spectrum should be priced and allocated, the government has a tough task at hand in reaching a solution.

[Honest 836]

Now, SP chief dials for Anil Ambani on mobile front

9 Jul, 2008, 0353 hrs IST, ET

NEW DELHI/KOLKATA: The Samajwadi Party is eager to help its friends. Even as it gets ready to support the government, the party’s general secretary Amar Singh has shot off a letter to Prime Minister Manmohan Singh demanding that GSM players be charged a one-time market rate for all the radio frequencies they hold over 6.2 MHz. Last year, RCOM chairman Anil Ambani had written several letters to both PM and the communications ministry on exactly similar lines.

SP is known to be close to several companies and with it set to play a major role in keeping the government in office, it is expected to extend a helping hand to them.

In his communication to PM dated July 4, Mr Singh has said some of the GSM players had been allotted spectrum beyond the contracted value of 6.2 MHz without payment of any additional fee. He has also demanded that the department of telecom (DoT) must impose a one time fee of Rs 1,312 crore for every MHz of spectrum that GSM players held over 6.2 mark while adding: “This can rake up Rs 10,000 crore to the government.”

Additionally, Mr Singh has also proposed that government can get a further Rs 5,000 crore if it were to hike revenue share for those operators who held more then 8 MHz of radio frequencies. Only GSM players such as Bharti Airtel and Vodafone hold radio frequencies beyond 8 MHz.

Mr Singh’s communication is similar to the letter that was sent last week by the Association of Unified Service Providers of India (AUSPI), the CDMA industry body, to the finance ministry, department of telecom, the Prime Minister’s office and Trai.

Sources told ET that there was intense pressure on the communications ministry to look into the demands of SP and CDMA operators following the new political arrangement at the centre.

Sources also added that DoT may come out with a compromise formula that might involve an undisclosed one-time levy applicable to existing telecom service licencees for spectrum allocations beyond 6.2 MHz along with a marginal rise in spectrum usage charges. Such a decision would instantly hurt the commercial interests of established GSM heavyweights like Bharti Airtel, Vodafone Essar, Idea and Aircel.

Significantly, Trai is silent on the delicate issue of introducing a one-time fixed charge for spectrum allocations beyond 6.2 MHz per circle. Trai chairman Nripendra Misra told ET: “In our recommendations, we have indicated that spectrum is underpriced in India and the rates need to revised. One option is to auction the spectrum. However, on the issue of introducing a one-time charge on spectrum allocations beyond 6.2 MHz, it is for the government to take a call. The Trai has not been approached on the subject and I have not given it a thought.”