The Department of Telecom has indicated that only Reliance Communications, Tata Teleservices and Shyam Sistema may be allowed to seek spectrum for offering CDMA based third generation (3G) mobile services.

Keeping out the possibility of any new player to bid for the spectrum, DoT has asked the three existing CDMA players to suggest a formula on how the available spectrum for 3G mobile services should be allocated between them.

The move to limit the allocation to existing players may have been taken since the Government has enough spectrum in the 800 Mhz band to accommodate only two CDMA players.

Besides, the quantum of spectrum available is not enough for a new player to start services. “The available spectrum in the 800 Mhz band will be best utilised if it is given to an operator which is already offering CDMA services in the country,” said a Government official. According to sources, only Reliance Communications and Tata Teleservices have so far shown interest in taking the 3G spectrum. In that case, DoT may not even conduct an auction and instead choose to give the spectrum to the two companies at a fraction of the cost paid by GSM operators during the auction for their spectrum.

But DoT may go for a limited auction if Shyam Sistema also evinces interest for the remaining slots. DoT has called the three CDMA operators for a meeting next week to discuss the way forward.

In the case of GSM-based 3G services, DoT has allowed new and foreign players to participate in the auction. However, uncertainty looms over the auction for GSM operators with some operators wanting to delay the process. While a majority of the telecom industry want the 3G auctions for GSM players to be held by January 30, hectic lobbying is on by some operators to push back the dates till after the general election. A decision on this will be taken by the Cabinet Committee on Economic Affairs, which is scheduled to meet on January 8.

Government sources said that efforts are on to conduct the auction as per the announced dates. They also said that the code of conduct for the general election will not impact the 3G auction process.

“Code of conduct kicks in before elections on any decisions that are aimed at garnering votes by giving grants or announcing some new projects. In the case of 3G, the policy is already announced and it is only the implementation which remains to be done. Auction can also be conducted as late as March,” said the official.

Source:thehindubusinessline