CDMA operators request DoT to postpone 3G bid

CDMA operators have asked the Department of Telecommunications (DoT) to stall the auction of spectrum for the much awaited third generation (3G) services until there is clarification on some key issues on spectrum charges.

In a letter to Telecom Secretary Siddhartha Behura, the Association of Unified Telecom Service Providers of India (Auspi) has pointed out that it is not possible to segregate the revenues earned through 2G services from that of 3G services. Auspi reasons that such bifurcation provides an arbitrage for operators to lower spectrum charges.

Though both GSM and CDMA operators have made their presentations before the DoT, Auspi has asked for the permission to allow the operators to make their case to a committee set up to decide on the method of calculation of spectrum charge.

In its guidelines issued on August 1, 2008, the DoT has put forward that “no annual spectrum charge would be payable for 3G telecom services in the first year from the date of allotment of spectrum and the licensee would have to pay annual spectrum charge of 1 per cent on the incremental revenue due to 3G services after a period of one year”.

The method of calculation, however, was to be notified later.

Auspi has, therefore, written to the secretary to clarify the details on the charge of spectrum, which will enable the bidders to make their decisions.

The association further says, “It is requested that this key aspect should be clarified before the 3G process is undertaken.”

The government is still in the process of identifying the agency which will conduct the auction of 3G spectrum. The agency is likely to be finanlised next week. The auction process is expected to be completed by the end of the year.