RCom alleges inefficient spectrum utilisation, in the backdrop of 3G auction

New Delhi: Criticising operators of global system for mobile (GSM) communications technology who complain of spectrum shortage, Reliance Communications (RCom) has written to the Telecom Regulatory Authority of India (TRAI) saying operators are inefficiently utilizing the spectrum.

RCom has also suggested that GSM operators are hoarding spectrum and not making fresh investments for expansion on the specious grounds that return on capital is poor.

In its reply to TRAI''s consultation paper on new licence norms, RCom said GSM operators served 135 million customers with about 37.2 MHz spectrum, which translated to 3.62 million subscribers per MHz.

In comparison, China serves 425 million GSM customers with 50 MHz spectrum or 8.5 million subscribers per MHz.

The criticism comes as communications minister A Raja says he may opt for a global auction of third generation technology (3G) licences, a move that will allow virtually any global operator to bid for offering this service in India.

According to sources familiar with developments, the global auction is aimed at attracting more foreign companies and sizeable investments to the market.

An auction will also fetch billions of dollars in the form of licence fees, especially now that India allows 74 per cent foreign direct investment in telecom services, which was not the case when the current set of mobile licences was awarded.

On the issue of additional fees for existing operators, the sources added that when global system for mobile (GSM) communication licences were issued in the mid- and late-''90s, the government had charged a one-time fee and allowed operators to use 4.4 MHz of spectrum (radio frequencies that make wireless communication possible and, therefore, the most valuable resource for mobile networks).

Operators have been allotted additional spectrum from time to time because of the huge growth in subscriber numbers since then. This was subject to operators fulfilling certain criteria like minimum number of subscribers as well as paying a spectrum use fee as a percentage of revenues.

Both measures — a global auction of 3G licences and an additional levy on existing 2G operators — will need discussion and agreement with the regulator, the Telecom Regulatory Authority of India. The sources added that the ministry was keen to take the regulator on board on all such issues.