HFCL, Shyam pay GSM spectrum fee as Raja rejects auctioning of airwaves

Mumbai: Two regional CDMA players – HFCL in Punjab and Shyam Telecom in Rajasthan – have deposited fee for their GSM spectrum as per the dual technology permitted by the government.

HFCL deposited Rs 151.75 crore for Punjab circle, while Shyam gave about Rs 32 crore for the Rajasthan circle.

With this three CDMA players, including Reliance Communications, have applied for dual GSM spectrum. Tata Teleservices' application is still awaiting clearance from the department of telecom.

The government said it would start apportioning airwaves to new entrants, including Reliance Communications, under the dual technology clause – a process that the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) refused to stay.

TDSAT had refused to stay the issuance of new licences to those who had applied as of September 25.

Solicitor-general G E Vahanvati, appearing for DoT, told TDSAT that the government would go ahead with the allotment of start-up spectrum to the new players. He also said that Tata Teleservices' application for use of cross-over technology would be considered favourably.

Tatas had given the application in October and had also claimed first right over spectrum ahead of Reliance Communications. But no decision has yet been taken in this regard.

Meanwhile, speaking at a telecom conference, Prime Minister Manmohan Singh said that spectrum should be allocated in a transparent and equitable manner to new entrants for encouraging competitiveness.

"We are going to allot the start up spectrum... this would be maximum up to 6.2 Mhz," he said.

HFCL and Shyam, both have also applied for GSM spectrum for the remaining 21 circles for which the DoT has already started the process of issuing letters of intent (LoI).

Sources said that DoT might issue LoIs and licences by the end of this week or early next week.

The move should help as many as 25 aspirants, including Unitech, Parsvnath, DLF, HFCL and Shyam Telecom, seeking to enter the lucrative GSM mobile services space.

On Cellular Operators Association of India's plea to stay the process of issuing new licenses, TDSAT chairman Arun Kumar said: "This is matter of pubic policy. I would not decide, let the government decide on it."

The GSM lobby group also informed the tribunal that it has boycotted the committee formed by the DoT for reconsidering the Telecom Engineering Centre's report.

Communications minister A Raja, meanwhile, ruled out auctioning of 2G spectrum to the new players to maintain level playing field between new and existing service providers.

"We cannot adopt auctioning route for existing 2G spectrum due to legal barriers. But for the next generation mobile services (3G), the government has already announced a policy that frequent will be allocated on the basis of auction," he said on the sidelines of India Telecom 2007.

Suo moto bids by Bharti followed by Idea Cellular for 4.4 MHz additional spectrum.

Bharti Airtel’s offer of Rs2,650 crore for 4.4 MHz additional spectrum and reserving the right to increase the bid further had raised speculations whether the government would consider this as a policy regime.

Idea Cellular had also written a letter to telecom secretary expressing its willingness to participate in the bidding process.

While Raja has been maintaining that auctioning of 2G spectrum would create a level playing field in favour of existing GSM operators, he also said spectrum needs to be allocated on the basis of real competition and in a transparent manner.