Aug 29, 2008

Business - 3G spectrum for CDMA operators to be auctioned

its earlier decision, the Communication and IT Ministry on Thursday said that 3G spectrum for CDMA operators will be auctioned. This is a shift from the earlier announced policy, which stipulated that CDMA operators will be allocated spectrum in the 800 Mhz band to the operator with most number of subscribers in a circle.The 800 Mhz is the most efficient and cost-effective frequency band for 3G services as far as CDMA is concerned. Without an auction, this spectrum would have for certain gone to Reliance Communications since it has the largest number of subscribers in most circles among the CDMA players. However, subscriber-linked allocation policy was objected to by the telecom regulator on the grounds that it would put the new players at a disadvantage as they would have no chance of getting 3G spectrum. Equal chance There are four pan-India CDMA players at present — Reliance Communications, Tata Teleservices, State-owned BSNL and the new entrant Sistema-backed Shyam Telecom. However, there are only two slots available in the 800 Mhz frequency band. Auctioning will allow all the players to get an equal chance to acquire 3G spectrum. It also brings parity in the respective 3G guidelines for GSM and CDMA players as the former also have to take part in an auction. Announcing the decision to change the guidelines for CDMA players, the Communications and IT Minister, Mr A. Raja, said, “Earlier there was not much competition in the CDMA section. There were only two players. Now with another player joining, the competition has emerged there as well. So it will now be auctioned as per TRAI’s recommendations instead of allocation given on the subscriber base.” The move comes as a blow to Reliance Communication which will now have to win the auction to acquire 3G spectrum. It will, however, benefit new players such as Sistema, which can now hope to win spectrum during the auction.Allocation and rollout Mr Raja also said that the auction process for both GSM and CDMA operators will be completed by October, which will enable operators to start rolling out 3G services by end of this year. “The spectrum auction process would be completed by October and I want the operators to roll out their 3G services within this year,” Mr Raja said on the sidelines of an industry event. DoT has already invited bids from agencies which will conduct the online auction. The modalities of the auction process are expected to be firmed up by the end of September. 3G or third generation technology marks a quantum jump in mobile services. 3G services are expected to facilitate higher speeds and data throughputs, which enable the delivery of a wide range of multimedia services, including video telephony, e-commerce and television on mobile devices such as handsets, smart phones and palm tops. 3G allows telecom operators to offer new services such as music video downloads, low-cost voice calls and wireless broadband access to laptops.

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