The government will issue new telecom licenses to nine firms which got LoIs last month, followed by allocation of start-up spectrum to roll out mobile services, a move that would fuel competition and bring about affordability in the cellular tariffs.

Telecom Secretary Siddarth Behura has cleared the file and sent it to Communication and IT Minister A Raja for his approval, sources said, adding that the Minister has decided to sign license agreements with all the LoI holders over next two days.

Some companies have approached the telecom tribunal TDSAT or Delhi High Court to stall the process but neither has stated it.

The Department of Telecom (DoT) has been saying that entry of new 5-6 pan-India service providers would bring mobile tariffs down by at least 50 per cent within six months to one year of their starting services.

In fact, Raja is understood to have prepared a road map for bringing down the mobile tariffs to just 25 paise a minute for local calls and that could be done only by bringing in new competition to the existing players.

Nine firms that were issued Letters of Intent (LoI) for starting mobile services include Unitech, Datacom, Tatas, Idea Cellular, Spice Telecom, S Tel and Shyam Telelink. The companies had deposited the requisite fees and bank guarantees with Department of Telecom on the day of getting LoIs, vying with each other for becoming the first applicant to get spectrum.

The government has decided to follow a first-come -first-served basis regarding payment of fees for allocation of spectrum, even if the seniority is by a fraction of a second, senior officials said, adding that players may not object to this approach as all were likely to be accommodated simultaneously in circles where spectrum was available.

The officials also said that next step should be immediate implementation of number portability as that would help improve quality of services as the operators would improve their networks to retain subscribers.

Although some players have cried foul over the seniority list prepared by the DoT, the department was of the view that most of the companies were expected to be accommodated for spectrum allocation and in fact some of the firms are of the view that the frequency should be distributed simultaneously to avoid any controversy.

Idea Cellular and Spice Communications have warned the government that they should be considered ahead of others as their applications have been pending since December 2006.

Source: Hindu