Spectrum crunch to delay new GSM network launches

By agencies   |   Thursday, 17 August 2006, 07:00 Hrs
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NEW DELHI: The non-availability of spectrum may delay the launch of around four new GSM mobile services, as also the pending government clearances. This is a result of the finance ministry's reluctance to allot a supplementary grant of $250 million to the Department of Telecommunications.

The DoT feels that fresh allocations, slated to happen before the defence forces release 45 Mhz of spectrum for commercial use, will primarily cater towards clearing pending applications made by existing service providers, reports Joji Thomas Philip.

The said grant was to be used for the $250 million project to free 45 Mhz spectrum, but with the funds not having been released, even the first phase issuing tenders for network equipment for the project slated to have been completed by September 2006 is pending.

While DoT sources point out that this will be completed between March and June '07, when the defense forces free the spectrum, further delays in clearances can occur unless the DoT works out a formula to distribute the 45 Mhz of spectrum. .

Due to the new applicants, namely GSM services from Reliance Communications, HFCL and Shyam Telecom as well as the launch of mobile services by Swiss-based Bycell Cellular, DoT can't go ahead with its initial plans, which included allotting 25 Mhz for 3G services and distributing the rest between the remaining GSM operators on account.

"The license conditions state that allocations cannot be made only to existing players. The stance that quantity released is not sufficient to be distributed among all players will not hold legally. We may have a scenario, where the DoT may wait for further release of spectrum by the defense forces before distributing the initial 45 Mhz to avoid any legal tangles," said an industry analyst.

What makes matters tougher for DoT is that Idea Cellular and Aircel Cellular have applied for licenses to begin operations on a pan-India basis.

Regarding applications from the new players, DoT maintains that none of the players in question had submitted the requisite plans for launch of their GSM operations. "These issues will come into play only if they indicate the seriousness of their plans by providing the requisite details," DoT sources added.

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