The Spectrum Tussle - Cdma V Gsm

[Honest 836]

Delhi High Court dismisses COAI petition on dual technology

22 Aug, 2008, 1701 hrs IST, PTI

NEW DELHI: In a setback to GSM operators, the Delhi High Court on Friday dismissed a petition challenging the government's decision to allow use of dual technology for mobile services and revised spectrum allocation norms.

The High Court imposed a cost of Rs 50,000 each on six petitioners, including Bharti Airtel, Vodafone-Essar and Idea Cellular, and their association Cellular Operators Association of India (COAI).

The money will be deposited with the Delhi High Court Legal Service Authority.

The verdict was pronounced by Justice Gita Mittal, who had reserved the judgement more than five months ago in the high stake matter.

The matter is also being heard in the telecom tribunal TDSAT.

Anil Ambani Group company RCOM and Tata Teleservices, both CDMA-based operators, are the major beneficiaries of this verdict as the government has already allocated GSM spectrum to RCOM in all circles and Tatas are getting the radio frequency as and when it is becoming available.

GSM lobby group COAI had challenged the Centre's decision to allow use of dual technology under which an operator is allowed to offer services on both GSM and CDMA platform under a unified licence.

The case filed by the COAI witnessed a marathon argument for over two months, virtually involving the entire telecom industry.

COAI had sought quashing of DoT's October 18 and 19, 2007 decisions to permit the use of dual technology and acceptance of sectoral regulator TRAI's recommendation for adoption of an enhanced subscriber-linked criteria for allocation of additional spectrum.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on December 12 last had refused to stay implementation of government's decision and COAI had also challenged TDSAT's order before the High Court.

GSM operators'lobby group COAI had alleged that the allotment of crossover spectrum to rival CDMA service providers by the government was in violation of Unified Access Service License regime.

COAI submitted that CDMA operators should provide GSM services only with the spectrum earlier allotted to them.

On the issue of dual technology, COAI said it could be understood in relation to new entrants but it does not apply in case of existing players. Such a practice would go against the notion of level-playing field.

However on the other hand, Reliance, a CDMA operator, submitted that the GSM players have got more than required spectrum and their effort is to stop it from getting the start-up spectrum for operations in the same segment.

The government had submitted that it would implement telecom regulator TRAI's recommendations for spectrum allocation as an interim measure.

COAI wanted the government to go by WPC criteria laid down on March 29, 2006, which recommends allocation of 10 MHz spectrum for 16 lakh subscribers in Delhi, whereas TEC suggests the same amount of radio waves for 48 lakh subscribers.

[FEVIN-RAJ 61]

RCOM is getting closer to GSM launch ...

[vmsanghrajka 0]

Yeah!! Good.. Now that what i call; 'slap on the face' of Vodafone-Airtel-Idea 'cartel'.. I think its a landmark decision by HC wherein they not only squashed the petition, they even fined them 50K to each operator.. Though, I think that fine should have been much higher..

[HetalDP 947]

Reliance GSM is for Fresh People AND We have to get a new Number forget to shoft 93 into GSM unless Number Portability does not come

SO Reliance GSM is not going to help you if you want to Retain your 93 Number

[Honest 836]

COAI fined twice in six months

24 Aug, 2008, 1149 hrs IST, PTI

NEW DELHI: They went with the good intention of protecting their businesses but were sent back twice by the courts that branded their motive as "ulterior" and slapped a huge cost on them.

Within a span of six months, GSM operators' lobby group COAI has been slapped with cost of proceedings by courts twice for filing a petition and an application on the issue of dual technology and allotment of additional spectrum.

The Delhi High Court on Friday directed Cellular Operators Association of India (COAI) along with Bharti Airtel, Vodafone Essar, Idea Cellular BPL Mobile and Spice Communication, to pay Rs 50,000 each as costs of proceedings.

The Court's direction to COAI to deposit the money with Delhi High Court Legal Service Committee came in a judgement which dismissed GSM lobby group's plea to quash Department of Telecom's decision to allow use of dual technology. Aitel, Vodafone, Idea, BPL and Spice were part of the petition.

Earlier on March 3 this year, the sectoral tribunal TDSAT, which is also hearing the same issue, had imposed a cost of Rs 10,000 on GSM operators' association for filing an application with an "ulterior objective".

"The application which has been moved almost two weeks after the date of the order suggests to me that it is an after thought and has been moved with some ulterior objective and is not bonafide," TDSAT Chairman Justice Arun Kumar had said while dismissing COAI's application.

TDSAT would commence its final hearing over COAI's petition challenging DoT's policy over crossover spectrum fom September 4 next.

[Honest 836]

COAI in dilemma, whether to challenge HC verdict

24 Aug, 2008, 1720 hrs IST, PTI

NEW DELHI: Stung by outright rejection of GSM operators' petition challenging government's policy on dual technology and revised spectrum allocation norms, the COAI is in dilemma whether to challenge the Delhi High Court's verdict to larger Bench or wait for telecom tribunal TDSAT's verdict.

The members of the Cellular Operators Association of India (COAI) are examining the Delhi High Court's judgement and a decision would be taken in a day or two, sources close the development said.

COAI had questioned the events of October 18 and 19, 2007, and said that the Department of Telecom had shown undue haste and hurry in which an in-principle approval was given to Reliance Communications for offering GSM services.

This was, however, rejected by the Delhi High Court in its judgement last week.

"Prima facie, it cannot be held that the decision of the government confers any unfair advantage to any particular person and consequently the submission that the government has disturbed the level playing field has to be rejected," Justice Gita Mittal had said in the judgement.

A senior official in the DoT said that it was strange on part of the GSM lobby to question government's act as the spectrum was first allocated to the existing GSM operators in various circles and this was also presented in the TDSAT last week. DoT counsel had said that spectrum was allocated in orderly manner and existing players have been beneficiary of this

[Honest 836]

TDSAT rings the final bell for govt and GSM operators

Business Standard, August 28, 2008, 19:00 IST

Telecom tribunal TDSAT today granted final opportunity to government and six GSM operators to file their reply of its notices issued on a petition filed by Anil Ambani Group's Reliance Communications, seeking withdrawal of additional spectrum held by rival operators.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) direction came after counsel appearing for RCom informed the tribunal that despite its directions neither the Department of Telecom (DoT) nor any of the six GSM operators has bothered to file their reply.

"Respondents (DoT and operators) are given final opportunity... Reply should be filed within three week and no further adjournment would be given in this case," said the tribunal.

The operators are Bharti Airtel, Vodafone Essar, Idea Cellular, Aircel Cellular, BPL Mobile and Spice Communications.

On being asked about the reason for delay by TDSAT Chairman Justice Arun Kumar, DoT informed that some meeting at the higher level did not happen, so it couldn't reply within the given time limit.

Later, TDSAT asked from the GSM operators,"Are you waiting for government reply". On it, counsels appearing for GSM operators requested the tribunal to give them a last opportunity which was accepted by the TDSAT.

In its petition filed in January this year, it had alleged that the six GSM operators were hoarding over 52 MHz of excess spectrum that DoT had alloted free of cost, which was beyond their eligibility.

[Honest 836]

CDMA players cite HC order to bolster spectrum claims

4 Sep, 2008, 0451 hrs IST, ET Bureau

NEW DELHI: Following the Delhi HC court’s decision to dismiss the petition by GSM players against dual technology (under which telcos can offer services on both GSM and CDMA technology platforms), CDMA players have now approached the telecom regulator, finance ministry and the Department of Telecom (DoT) claiming that the HC judgment also indicates that GSM players are not entitled to radio frequencies beyond the 6.2 MHz mark.

It has been a long-pending demand of the CDMA-based operators that GSM players be mandated to return all excess radio frequencies beyond the 6.2 MHz mark in every circle. CDMA operators also want the government to impose spectrum charges equivalent to the market value for all ‘extra radio frequencies held by GSM players beyond the 6.2 MHz mark.

They want GSM players be charged Rs 1,312 Crore per MHz for all radio frequencies beyond this figure and say that this would bring in revenues to the tune of Rs 10,000 crore to the government.

On the other hand, GSM operators say they are entitled to spectrum up to 15 MHz. They also maintain that ‘licence terms has been outlined by successive governments over a decade and the allegation of CDMA stakeholders tantamounts to raising fingers at every government and administration over the last decade and accusing them of acting in an extra-constitutional and unauthorised manner’.

The Association of Unified Service Providers of India (AUSPI), the body representing CDMA players in its communication to all wings of the government has highlighted several points from the Delhi High Court judgment which it claims emphasizes that licence conditions entitles GSM players only to 6.2 MHz of radio frequencies. It has pointed out that in additional solicitor general Vikas Singh during the arguments had said that the petitioners (GSM players) were entitled only to 6.2 MHz.

However, at the same time, AUSPI had recently withdrawn its petition in the telecom tribunal challenging the allotment of over 6.2 MHz to GSM players.

“In view of the many observations of the government and High Court of Delhi in the judgement, it is very much urgent to take action regarding the spectrum held beyond the contracted amount by GSM operators,” the AUSPI communication added.

The department of telecommunications (DoT) had recently shot down Samajwadi Party general secretary Amar Singh’s demand to the Prime Minister’s Office that GSM players be charged a one-time spectrum charge for all radio frequencies they hold beyond 6.2 MHz.

The DoT, in its reply, has told the PMO that it cannot adopt Mr Singh’s suggested methodology of computing the one-time spectrum levy payable by GSM players and also the quantum of additional levy on recurring spectrum usage charges.

[Honest 836]

BSNL rejects pvt GSM operators allegations

7 Sep, 2008, 1624 hrs IST, PTI

NEW DELHI: State-run BSNL in an affidavit before TDSAT has rejected the GSM operators' allegations of government's bias towards it while allotting spectrum and said that COAI plea to drag it as a party in on going legal fest over cross over technology was against the public interest.

"BSNL has been validly allocated spectrum as per its eligibility and entitlement. The allegation of any favour to BSNL in this regard is completely baseless incorrect and is specifically denied," BSNL submitted in its four-page affidavit before the telecom tribunal TDSAT.

The telecom giant submitted that plea of COAI, the GSM operators' association, to add it as a party in this suit "is completely misconceived, contrary to the public interest and deserving rejection by the orders of this Tribunal".

"Private operators have always found themselves placed in a beneficial position in relation to allocation of spectrum to them," BSNL said.

Justifying spectrum allotment, BSNL submitted that it has been providing telecommunication services all over the country and in all remote and rural areas.

"Where, despite licence conditions, private operators had never discharged their obligations under their respective licences with regard to rural telephony."

BSNL submitted that DoT had initially like other operators sanctioned 6.2 MHz spectrum to it. Later, by subsequent allocation DoT allocated further spectrum in the 1800 MHz band for its various circles.

"In some of the circles of BSNL, the spectrum is 6.2 MHz. even today. In certain other Circles, BSNL is having a spectrum of 8 MHz, and in certain other circles it is 10 MHz." said the PSU.

[Honest 836]

New players get more GSM spectrum

Business Line

New Delhi, Sept. 9 The Government has released start-up GSM spectrum to new telecom players including Datacom and Unitech, in four circles of Mumbai, Maharashtra, Punjab and UP (East).

Tata Teleservices, which has got GSM licence under dual technology policy, has also been given spectrum in the lucrative Mumbai circle. With this, new players can now roll out services in 10 circles as the Government has already released spectrum in six circles of Tamil Nadu, Andhra Pradesh, Kerala, Karmataka, Orissa and Madhya Pradesh.

In Punjab, only three players have been accommodated as only 15 MHz spectrum was available.

[Honest 836]

DoT to audit user base prior to 2G spectrum allotment

15 Sep, 2008, 0220 hrs IST, ET

NEW DELHI: The department of telecom (DoT) has decided that it will allot additional second generation (2G) radio frequencies to telecom operators only after independently verifying their subscriber base. Currently, all mobile services in the country run on 2G radio frequencies and 2G spectrum allotment is based on subscriber base.

Under existing regulations, GSM and CDMA operators are entitled to a maximum of 15 MHz and 7.5 MHz of 2G radio frequencies, respectively, and this is awarded in tranches. This means, every time the subscriber base of an existing operator reaches a pre-defined subscriber base, they are given additional radio frequencies. However, this methodology of allotting airwaves has come under severe criticism with several operators accusing the incumbent players of jacking up to subscriber bases to get more radio frequencies. Telcos such as the Tatas have always been demanding that the DoT audit the subscriber base of operators to prevent any player from hoarding spectrum.

The DoT has now decided that its deputy director general (security) in consultations with the wireless advisor will verify the subscriber numbers declared by telcos before they are given additional radio frequencies.

All existing operators are due for additional spectrum in several circles as their subscriber figures have crossed the pre-defined marks prescribed by Trai. DoT sources said that these allotments will now be made only after the claims of operators are verified.

This marks the second attempt by the DoT to tighten the allocation of radio frequencies to telcos. Earlier this year, the DoT had adopted Trai’s recommendations that both GSM and CDMA players increase their subscriber base between 2-6 times (depending on the circle) before being granted additional spectrum. The DoT also endorsed the official spectrum panel’s recommendation that GSM operators be given additional spectrum in tranches of 1 MHz against the current norm where they are given additional radio frequencies in blocks of 1.8-2.2 MHz.

[Honest 836]

New spectrum charges to be announced by next month: Raja

23 Sep, 2008, 1402 hrs IST, PTI

NEW DELHI: Telecom Minister A Raja today said new spectrum charges, which will be a one-time charge for the radio wave beyond 6.2 MHz, would be announced by the end of October. He said that the telecom ministry is in discussions with finance ministry and GSM operators to work out new charges for additional spectrum beyond 6.2 MHz.

The minister also said his ministry is also talking to finance ministry on the issue of relaxing borrowing norms for aspiring 3G spectrum bidders. COAI and AUSPI have written to the finance ministry for easing ECB norms to enable prospective 3G bidders to access funds, cost effectively.

On the Blackberry issue, Raja said, "While a solution is still being worked out, the services cannot be denied to the customers."

[Honest 836]

Mobile operators to pay for excess 2G spectrum

Business Line

Bharti, Vodafone, Idea may have to cough up Rs 4,000 cr as one-time fee.

New Delhi, Sept. 23 Mobile operators, including Bharti Airtel, Vodafone Essar and Idea Cellular, may have to cough up as much as Rs 4,000 crore each for having spectrum beyond 6.2 Mhz for offering cellular services (2G).

The one-time fee is being imposed on the grounds that the cellular licence does not mention spectrum allocation beyond 6.2 Mhz in each circle even as some of the operators have been given up to 12 Mhz in some areas. The proposed fee is being seen as a way to recover the value for the excess spectrum.

The Communications and IT Minister, Mr A. Raja, on Tuesday said that the issue was being discussed with the Finance Ministry and a decision on the exact quantum of the fee and the method of calculation will be announced by October.

According to a proposal being worked out by the Department of Telecom, mobile operators may have to cough up as much as Rs 80 crore for each unit of spectrum bandwidth beyond 6.2 Mhz in Metros and Circle A States, Rs 40 crore in Circle B and Rs 20 crore in Circle C.

While the GSM licence does not mention spectrum beyond 6.2 Mhz, some of the operators, including Bharti Airtel, have been given up to 12 Mhz based on subscriber numbers. If this proposal is accepted, then an operator such as Bharti may have to pay a total of Rs 1,600 crore.

There is, however, another proposal to charge a flat fee of Rs 266 crore for each unit of spectrum irrespective of the area. If this option is accepted, then Bharti will be forced to pay over Rs 4,000 crore for its pan-Indian spectrum.

Other players such as Vodafone and Idea will have to pay lower amounts since they do not own as much spectrum as Bharti Airtel does.

The Samajwadi Party leader, Mr Amar Singh, had also suggested a formula whereby existing GSM players would have had to pay Rs 1,312 crore for each unit of spectrum beyond 6.2 Mhz. This would take the bill to over Rs 10,000 crore for each player.

However, DoT is not in favour of this scheme as it will be difficult for operators to pay such a high amount. DoT has also suggested an across-the-board increase in annual spectrum charges paid by the operators as a percentage of their revenues. Currently, operators pay up to 4 per cent of their revenues depending on the quantum of spectrum they hold. DoT has proposed to increase the rate by another one per cent.

[Honest 836]

CDMA, GSM players take spectrum battle to new govt panel

24 Sep, 2008, 0312 hrs IST, ET

NEW DELHI: CDMA and GSM-based telecom operators have extended their war of words and battle for spectrum to the new committee set up by the government to come out with an alternative mode of allocation of radio frequencies.

Even as this committee is examining the possibility of junking the subscriber-based allocation model, which India currently uses, its members are now debating the quantity of radio frequencies that operators on each platform are eligible.

GSM players say that the new policy should incorporate the existing allocation limits where they are entitled to a maximum of 15 MHz of radio frequencies per circle, while for CDMA it is 7.5 Mhz.

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.

The TRAI norms and the DoT’s earlier policy announcements state that GSM players will be given an maximum of 15 Mhz per circle. CDMA operators have now told this committee the spectrum allocation for GSM players is capped at 6.2 MHz.

“The reference to 6.2 MHz was for the first time made in the 4th cellular license issued in 2001, which was subject to ‘usage, justification and availability’ and also ‘on payment of additional license fee’. This is not to be confused with recurring spectrum usage charges, which are separately levied as a percentage of wireless revenues,” the Association of Unified Service Providers of India (AUSPI), the body representing CDMA players said in their communication to the spectrum committee.

GSM players on the other hand argue that allocations beyond 6.2 MHz limits have been consistent with government guidelines and licensing provisions.

AUSPI, which for years have been demanding that GSM operators be charged a one-time fee for all allocations beyond the 6.2 MHz mark, has now taken up the issue with this committee too. “Even if the government ignores the manifestly illegal allocation beyond contracted spectrum of 6.2 MHz, it should at the very least ensure that it levies a fair charge to share the super-normal profits of operators who have excess spectrum,” the CDMA body said.

GSM sources, while pointing out that levying charges for past spectrum allocations is outside the terms of this committee also add that ‘licence terms has been outlined by successive governments over a decade and the allegation of CDMA stakeholders tantamounts to raising fingers at every government and administration over the last decade and accusing them of acting in an extra-constitutional and unauthorised manner’.

Even as operators on both platforms are involved in a war of words, ET has learnt that the spectrum committee is considering an auction approach, where operators are given a minimum allotment along with the licence and all further allotments would be via a bidding process.

[Sadikk 301]

ye log jhagadte hi rahenge ya kuch kaam ka kaam bhi karenge?

[suvirajshetty 4]

verifying the user base of operators is a good idea..as major gsm operators has done..every month they jack the user addition

Edited September 24, 2008 by suvirajshetty

[HetalDP 947]

Charge them all for Spectrum GSM or CDMA so they will go for 3G as 3G Require 1/3 of the Bandwidth GSM requires

[kshah 452]

Infact, first of all government should ban life time prepaid, it keeps on increasing user base. Also government should impose some sort of levi on number of users too, so that all operators reduces number of disconnected subscribers.

And, 3G must be rolled out, sell spectrum at hefty price, later government can always reduce license fees. Why they want foreign players in India? To monopolize air space?

[Honest 836]

No auction of 2G spectrum; One-time fee on 6.2 Mhz spectrum

24 Sep, 2008, 1731 hrs IST, PTI

NEW DELHI: Telecom Minister A Raja on Wednesday ruled out auction of 2G spectrum and said that the department is in discussion with finance ministry to charge a one-time fee on the extra radio waves to the operators beyond the initial start-up spectrum.

"It (one-time charge on 2G spectrum) has been discussed and is going to be discussed in the Telecom Commission in consultation with the finance ministry and one-time charges will be for the 2G spectrum for over 6.2 Mhz spectrum.

It is already clarified that 2G can not be auctioned because the licence conditions say wherever the initial spectrum of 4.4 Mhz has been given, it becomes a contractual obligation since it was allotted to various operators in 1994.

Now I can not change the rules for the new operators. It will be discrimination totally," Raja said on the sidelines of a Telecom Summit.

Yesterday Raja had said government would come out with new spectrum charges which could include a one-time fee by the end of October.

"A one-time charge could be there over and above the adjusted gross revenue of the telecom companies for spectrum above 6.2 Mhz," Raja had said. The move will raise the cost of spectrum for operators. At present, Bharti, Vodafone, Idea and BPL hold more than 6.2 Mhz of spectrum.

Earlier, TRAI had recommended a one-time spectrum charge for 2G spectrum beyond 10 MHz for GSM operators and five MHz for CDMA operators.

The regulator had suggested that for every additional one MHz beyond 10 MHz in Mumbai, Delhi and category A circles, operators should be charged Rs 16 crore.

[Honest 836]

Vacation of defence spectrum unlikely Text

24 Sep, 2008, 1519 hrs IST, IANS

NEW DELHI: Allocation for fresh spectrum from the defence sector for operation of second generation (2G) services appears bleak, according to a senior government official.

"Defence also does not have much spectrum and it is very difficult for them to vacate the same in the near future," the official from the senior telecommunication ministry told IANS Wednesday on condition of anonymity.

The 1,800 MHz and 900 MHz bandwidth are full currently and no spectrum can be expected in this, he said, adding: "Delhi and Mumbai circles are already saturated."

"We got spectrum tor south India and we gave it to them (telecom operators). As and soon we get fresh spectrum, we will allocate the same".

[suvirajshetty 4]

its grossly wrong to ban lifetime users..there no problem if subscribers increases..its the operators who should be more efficient with spectrum and deploy latest technology for better use of spectrum....why poor should be deprived of mobile technology...

[Honest 836]

TRAI objects to revenue break-up

Business Line

New Delhi, Sept. 24 The Telecom Regulatory Authority of India (TRAI) has raised objections to the Government’s decision to allow operators to separate their revenues from 2G and 3G services respectively for the purpose of calculating the annual spectrum charges. TRAI has told the Department of Telecom (DoT) that such a separation is not possible.

“Both these services are capable of providing triple play services. Moreover, there will be many common control equipment for 2G and 3G and apportioning the cost to these two services will be a very complex and cumbersome exercise. There is also an apprehension that such bifurcation of revenues may lead to wrong booing of revenues by some of the service providers and lower spectrum charges,” the TRAI said in a note to DoT.

Operators currently pay a maximum of 4 per cent of their annual revenues depending on the quantum of the 2G spectrum they use. DoT has said that operators need to pay one per cent on revenues earned from offering 3G services as spectrum charges. This means that an operator like Bharti Airtel, instead of coughing up a total of 5 per cent of their combined revenues from both 2G and 3G services, will have to pay 1 per cent on revenues from 3G services and another 4 per cent on revenues from 2G services separately.

Given the average revenue per user at present is around Rs 300 per month, operators will have to pay a maximum of around Rs 3 per 3G subscriber each month to the Government under the new formula. If DoT had imposed the revenue on combined revenues, then operators would have had to pay Rs 15 even for the newly acquired 3G subscriber.

Huge savings

DoT’s decision will result in huge savings for the existing operators who win 3G spectrum. According to industry observers, it could encourage operators to rope in more subscribers for 3G services as they have to pay a lower spectrum fee compared to what they pay for 2G services.

DoT’s decision, however, is in line with its earlier stand to allow operators with dual technology to pay spectrum charges separately.

[Honest 836]

Revenue break-up: DoT sets up review panel

Business Line

In view of the objections raised by the telecom regulator, the Department of Telecom is now rethinking its earlier decision to allow operators to separate their revenues from 2G and 3G services for the purpose of calculating the annual spectrum charges.

The DoT has set up a committee to look into whether a mechanism to segregate revenues was possible or not.

The Telecom Regulatory Authority of India had told the DoT that such a separation was not possible.

In a letter to the DoT, the regulator had said, “Both these services are capable of providing triple play services. Moreover, there will be many common control equipment for 2G and 3G and apportioning the cost to these two services will be a very complex and cumbersome exercise. There is also the apprehension that such bifurcation of the revenue may lead to some service providers paying lower spectrum charges.”

The industry is also divided on the issue with CDMA players supporting the views of TRAI. However, the Cellular Operators’ Association of India said that it was possible to segregate revenues and operators in Hong Kong have implemented such a mechanism.

Operators currently pay a maximum of 4 per cent of their annual revenues depending on the quantum of the 2G spectrum they use. DoT has said that operators need to pay one per cent on revenues earned from offering 3G services as spectrum charges.

This means that an operator like Bharti Airtel, instead of coughing up a total of 5 per cent of their combined revenues from both 2G and 3G services, will have to pay 1 per cent on revenues from 3G services and another 4 per cent on revenues from 2G services separately.

[Honest 836]

Why low licence fee for new telcos, CVC asks DoT

Economic Times l 2 Oct. 2008 l New Delhi

The Central Vigilance Commission (CVC) has sought an explanation from the department of telecom (DoT) for giving licences to new telecom players at prices that were fixed in 2001.

The move is bound to increase the pressure on the DoT, which has been heavily criticised for the recent Swan-Etisalat deal. Swan Telecom, one of the new entrants, paid Rs 1,537 crore for licences in 13 circles earlier this year.

Recently, it offloaded a 45% stake in the company to UAE’s Etisalat for $900 million, which valued its licence at Rs 9,000 crore which is six times the licence fee.

Asked if the CVC was probing the Swan deal, a top CVC official clarified that the agency was probing the allocation of licences to all new entrants.

The official also added that the probe was not linked to the Swan-Etisalat deal. “Even before this deal, we had pointed out several anomalies in the allocation of 2G licences by DoT. We had demanded an explanation and the DoT had replied to our queries.

However, we were not satisfied with DoT’s response and had informed the department. We have also sought additional details from them. We are awaiting their response and are probing the issue,” the CVC official said.

Sources said the CVC wants the DoT to clarify the rationale behind allotting 2G radio frequencies without auction to the new entrants and dual technology licence holders such as Reliance Communications and the Tatas.

Earlier this year, the CVC had also advised the DoT to auction the remaining 2G spectrum, while adding: “The true value of this finite and precious resource needs to be realised.”

As per industry estimates, the government has lost about Rs 50,000 crore on account of giving away pan-India telecom licences for a mere Rs 1,651 crore each, a price discovered seven years ago. Swan’s valuation increased six times despite the fact that it had not invested in infrastructure, not launched services in any circles or even acquired a single customer.

Following the deal, the DoT has been under pressure to justify why the licences, which comes bundled with startup radio frequencies were not awarded at market prices.

The finance ministry had been repeatedly demanding that the DoT auction all 2G spectrums.

[Saurav 22]

I think many people have more than 1 sim with lifetime validity. But they use only 1 at a time. so subscriber base/ count will never be correct.