GSM players renew fight over spectrum

NEW DELHI: More than a week after the telecom dispute tribunal (TDSAT) refused to stay the process of allocation of spectrum to telecom operators under the “dual technology” category, GSM players Bharti, Vodafone Essar, Idea Cellular and Spice Telecom have decided to stay united and seek further legal recourse.

The Cellular Operators Association of India (COAI) on Thursday said its four members “have unitedly decided to approach the Delhi High Court in a writ petition” against the interim order issued by TDSAT on December 12.

COAI, representing the GSM players, had in November moved TDSAT against the government for allowing use of dual technology-CDMA players offering GSM service and vice versa. The association had sought a stay on grant of spectrum to CDMA player Reliance Communications for starting pan-India GSM operations.

Subsequently, a GSM member — Aircel (which has Malaysia’s Maxis as the majority partner) — pulled out of the COAI petition. It is believed that Aircel did not want to get caught in a legal battle at a time when it was awaiting spectrum to start operations in several new circles.

Recently, after the TDSAT order of December 12, there was also speculation that Vodafone Essar and Idea Cellular may not like to challenge the tribunal’s verdict in the HC, as these two players were keen too on starting services in new circles after getting start-up spectrum, rather than fighting legal battles.

That would have left Bharti alone. However, a day after the spectrum allocation review committee asked the government to take an appropriate view on the issue, COAI members decided to stay united on the matter of challenging the TDSAT order. The association of GSM operators also said on Thursday that the spectrum review committee’s report is a validation of the COAI view.

On Wednesday, the review committee, headed by additional secretary at the Department of Telecommunications (DoT) R Bandopadhyay, submitted a bulky report to the DoT but admitted that the panel was unable to reach a decision, due to sharp differences among its members, which included IIT professors and industry representatives besides ministry officials.

The review committee, whose mandate was to decide on the right subscriber-linked criteria for spectrum allocation, has now left the job to the government.

The review committee was assessing the subscriber-linked spectrum allocation norms recommended by the Telecom Regulatory Authority of India (TRAI) and also by Telecom Engineering Centre (TEC), which is a technical wing of DoT.

GSM operators have been opposed to the stringent subscriber-linked spectrum allocation norms, and COAI even pulled out from the Bandopadhyay committee later, saying that the panel was working towards a pre-determined result.

Some members in the committee wanted GSM operators to follow the stricter TEC norms and favoured the less stringent TRAI criteria for the CDMA players, sources said.

Now, with the review committee leaving the spectrum allocation norm decision to the government, while recommending a combination of auction and subscriber-linked criteria, COAI sees in it a ray of hope, an industry source pointed out.

As reported earlier, GSM players Bharti and Idea wrote to the DoT secretary D S Mathur recently offering to pay Rs 2,600 crore and Rs 1,650 crore respectively as initial bid money for additional spectrum allocation.

They were ready to offer more in case there was an auction. The trigger for this was Reliance Communications being allowed to offer GSM services under dual technology norms, after it paid Rs 1,650 crore for pan-India GSM services.

Currently, Rs 1,650 crore is the licence fee for pan-India mobile services, with which one gets a startup spectrum. There’s no extra payment for spectrum allocation, apart from the revenue-share fee paid for spectrum usage by telcos.

DoT and the finance ministry had recently locked horns over the issue of licence fee of Rs 1,650 crore. While the
finance ministry wanted to know why the old fee of Rs 1,650 crore was being charged to RCom under dual technology, DoT argued that the fee was as per a cabinet decision of 2003 and a recent TRAI recommendation.

Even Prime Minister Manmohan Singh said that the government should not lose sight of revenue while allocating spectrum. Later, communications minister A Raja said that 2G spectrum cannot be auctioned as it would create “legal barriers”.

But it is learnt that a DoT committee is working out a mechanism to price spectrum. Meanwhile, COAI has said that the “non grant of a stay by the TDSAT will “create irreversible third-party rights”.

m_nivedita@dnaindia.net