India to address U.S. woes on 3G spectrum auction

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New Delhi: As the U.S. continues batting for its operators, such as Verizon, AT&T and Sprint, seeking a favourable platform for these companies to participate in India's 3G and WiMax auctions, India is set to assure the U.S. that the interests of foreign telecom operators will not be compromised during the upcoming auctions. A delegation from the Department of Telecom (DoT) and IT will meet their counterparts in the U.S. in Washington DC to discuss the U.S. demands for more transparency in the auctions and spectrum allocation policy, reports Economic Times. Other U.S. firms, such as Google and Intel, have also been linked being interested in the WiWax spectrum auctions. Also on the agenda are the liberalization of internet telephony and allowing virtual private network operators to set shop in India. The U.S. Telecommunications subcommittee has also said that despite India's telecom regulator TRAI recommending lifting of all curbs on the internet telephony and also calling for mobile virtual network operators (MVNOs) to be permitted to offer services, the government here has so far not cleared these policies. MVNOs are companies, such as Virgin, which do not own networks and airwaves, but ride on the infrastructure of other telecom service providers. Incidentally, the India-U.S. ICT Working Group Meeting comes just two days after Internet Service Providers (ISPs) in India had approached the Competition Commission of India against the government's refusal to lift curbs on net telephony. At present, ISPs are only allowed to offer internet telephony for international calls. Within the country, net telephony is restricted to calls between computers. This implies that, a domestic call for a computer cannot be terminated on the mobile phone and vice-versa. On 3G airwaves auctions, which allows telcos to offer high-end services such as video conferencing and ultra fast internet on the mobiles, the U.S. Subcommittee has sought that DoT provide clarity on when investor conferences would be held, the exact amount of airwaves that is available for sale and also the time line for the process. The U.S. has also repeatedly pointed out that as per the current policy, while new 3G players will have to pay $410 million to obtain a UAS license to provide wireless and wireline services, these players won't get the startup 2G spectrum that is required to provide traditional voice and data services. So far, the UAS license, which costs 1,651 crore, came bundled with startup 2G spectrum. The DoT, in its reply, is set to impress upon the U.S. Subcommittee that new entrants who are successful in their 3G bids, will be given priority for grant of 2G spectrum. This implies that, successful 3G bidders entering India for the first time, can jump the queue of 343 pending applications for universal access service (UAS) licenses. Addressing other concern raised by the U.S., the Indian delegation will also tell the its Telecommunications Subcommittee that foreign companies will be able to bid for 3G spectrum as 100 percent foreign entities, and only if successful, would have to find and Indian partner who must hold a minimum of 26 percent stake in the telecoms entity. This is because, Indian regulations do not allow 100 percent foreign holdings in telecom companies.