Government to allow foreign companies in 3G telecom services

Mumbai: The government will allow foreign companies to participate in the auction of spectrum under the policy finalised for 3G telecom services in the country.

Communications and information technology minister A Raja has approved the final guidelines for 3G services and the government is expected to initiate the bidding process for 3G spectrum within the next two months, sources said. 

Raja is understood to have discussed the matter with finance minister P Chidambaram, and the decision to allow foreign companies is crucial in view of the strong opposition of the Telecom Regulatory Authority of India.

TRAI is adamant on its views of restricting the 3G spectrum to holders of unified access service licence (UASL), so as to ensure faster rollout of the services.

The government, on the other hand, proposes to issue new UASLs to successful bidders who do not possess licences to offer telecom services in the country.

The department of telecommunications, however, has failed to mention any specific spectrum for auctioning for 3G services required by the CDMA players.

DoT's draft policy has only mentioned 2.1MHz band for auctioning which is ideal for GSM-based 3G services.  CDMA players will ideally have spectrum in the 800 MHz or even 1900 MHz and 450 MHz for 3G services since the EVDO technology is supposed to operate best on these frequencies.

These operators are required to pay a fraction of the amount paid by GSM operators for 3G spectrum. But there aren't enough slots in the 800MHz for CDMA operators. There aren't specific guidelines on auctioning of this band in the DoT draft.

Currently there are four major CDMA players in the country - Reliance Communications, Tata Teleservices, BSNL and Shyam Telelink.