DoT to allow 10 -12 3G operators per circle

By siliconindia   |   Wednesday, 30 July 2008, 04:27 Hrs
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New Delhi: India is all set to out pass most countries in terms of third generation operators with 51 to 60 MHz of spectrum identified, allowing DoT to supply 12 licenses each in the states comprising of Andhra Pradesh, Tamil Nadu (including Chennai), Haryana, Karnataka, Orissa and Kerala. While Kolkata and Madhya Pradesh will be distributed with 10 licenses each.

Globally, the number of operators per country ranges from two to a maximum of five. The UK has five 3G players, Australia and Brazil four each and most European states have between two and three. Singapore has only two players and the Philippines three. Overall, there are 228 operators in 94 countries that offer 3G services

The third generation (3G) policy of Department of Telecommunication (DoT) awaits change, as more spectrums are identified. In accordance with the previous 25 MHz availability of spectrum, DoT had formed the 3G policy, which allows only five licenses to be offered per circle. However, the discovery of added spectrums ensures a distribution of 10 to 12 licenses, thus demanding an amendment of the policy. However, states like Delhi, Gujarat and Himachal Pradesh have very low frequencies ranging from 21MHz to 23MHz, which can allow only four operators each.

Under the proposed policy, any service provider with a universal access service license or anyone with 3G-service experience will be eligible for the license. Moreover, there is the second generation (2G) service licenses provided to 11 to 13 operators in each circle. This would leave the subscribers with a wide range of operators around 15 to 16 to choose from for both 2G and 3G services.

But this has taken its toll on the business prospects of the newbies of this sector, since the choice availability leads to a decline in the values of the licenses acquired. As reported by Business Standard, a company chairman says, "The valuation of our license has virtually halved or become a third of what we had estimated in January. That is because the market, despite the growth, cannot accommodate so many players. U.S., Europe and Japan have shown no interest in India, only cash-rich West Asian companies like Bahrain Telecom or Qtel are looking." With around 300 million subscriber base, which is predicted to reach 700 million by 2011, and around five to six current operators dominating half of the market, makes the seven to 10 newbies to vie for the remaining half.

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