Even as telecom regulator TRAI is yet to give its recommendations on capping the number of operators per circle, GSM players have shot off a letter to government saying that scarcity of spectrum may not allow open entry.
“It may be appreciated that in an environment where raw material (spectrum) is limited, it is not possible to follow a policy of unlimited competition and open entry,” Cellular Operators Association of India (COAI) said in a letter to the Telecom Commission Chairman D S Mathur.
COAI’s current position contradicts its earlier stance that India should enhance the foreign direct investment (FDI) limit in telecom sector to 74 per cent to increase competition in the sector.
According to COAI, as per the present commitment and promise of the government, each licensee/operator is entitled to receive up to 15 MHz spectrum upon achieving the pre- defined subscriber linked milestones.
Department of Telecom (DoT) is hoping to get spectrum from the armed forces, for which the process is under way, and operators in the GSM and CDMA segment are at loggerhead over the allocation of additional airwaves.
One of the CDMA players said GSM operators have monopolised the spectrum and suggested that government should think of levying appropriate spectrum usage charges for allocation of airwaves beyond 6.2 MHz to ensure effective usage of the limited and scarce resource.
Telecom Regulatory Authority of India (TRAI) is in the process of finalising its recommendations on the service conditions of license agreement including on whether number of players be restricted or not. It had organised open house sessions to take industry’s views on the issue.
“It is submitted that the concern of the industry arises not on account of extent of competition, but because of the limited or in fact short supply of spectrum,” COAI Director General T V Ramachandran said in the letter.
He said: “The Indian GSM industry has…thrived in one of the most intensely competitive markets in the world, and given the fact that there are already up to eight operators in every service area, it is unlikely that the introduction of ninth or even 10th player will unduly concern the GSM industry from extent of competition.”
On the other hand, CDMA players like Tata Teleservices and Reliance Communications have been demanding level playing field in the allocation of spectrum and its effective usage. Some of the players are not even averse to auction of spectrum for existing 2G services.
Reliance Communications has also applied for spectrum in the GSM segment to expand its services beyond the eight circles its currently operates in and has made several presentations to DoT on the same.