In a bid to level the playing field between old and new telecom operators, the Department of Telecom has decided that all entities with a unified access licence will be eligible to bid for third generation (3G) mobile licence.

This means that companies such as Shyam, Unitech, Videocon, STel and Swan, which recently got new licences, will be able to take part in the auction for 3G services. A new company wanting to take part in the auction will have to take a unified access licence by paying an entry fee of Rs 1,650 crore for pan Indian operations. DoT’s decision will increase competition for existing operators such as Airtel, Vodafone and Reliance Communication as they were expecting the auction to be limited to only those companies which were currently in operation. Since new licence holders are still awaiting release of spectrum to launch 2G mobile services, they may compete with the existing players for acquiring 3G spectrum.

“Both new and old operators are desperate to get the 3G spectrum. While existing operators want 3G spectrum for packing in more subscribers in line with the growing market, new operators would want it to launch their operations,” said a market analyst. DoT has addressed the issue of leveling the playing field since the new players have paid Rs 1,650 crore already, which is equal to what the current operators paid as entry fee when they got their licence.

This could also give a chance to companies such as Moser Baer, Hindujas and AT&T which could not acquire a licence for 2G mobile services. Since these companies were at the back of a queue of applicants, they were left out by DoT based on the first-come first-served policy. Now they could straightaway bid for 3G spectrum after taking a licence.

As per the proposals successful bidders would be given 5 Mhz spectrum each in the 2.1 Ghz band. This means that at least six operators could get a 3G berth given that DoT has 30 Mhz spectrum to give out initially. While BSNL and MTNL will get 3G licence without participating in the bidding, the two companies will have to cough up the same amount as quoted by the highest bidder during the auction process. The final guidelines are expected to be released by April and the auction is being planned for the later part of the year.

Third generation services will enable mobile users to get high speed broadband connectivity on their handsets. This will allow operators to start offering interesting data services like video on demand and mobile TV. Operators also need 3G spectrum as it is more efficient in packing in more number of users in lesser bandwidth compared to existing mobile technologies.

Source: HinduBusinessLine