DoT finds new spectrum for TN

Five licensees benefit despite 'shortage'.

Despite the government's claims of an acute shortage of spectrum for GSM mobile services, the Department of Telecommunications (DoT) today cleared the release of 22 MHz to five new telecom licensees in Tamil Nadu.

Venugopal Dhoot-promoted Datacom Solutions, Aditya Birla group company Idea Cellular, real estate giant Unitech group, Mumbai-based Swan Telecom and the BPL group company Loop Telecom are being allocated 4.4 MHz of spectrum each to start operations.

Spectrum refers to the radio frequencies that enable wireless communications and has been the source of considerable controversy over the past year.

With this move, Tamil Nadu (including Chennai) will have over ten players (the competitors include CDMA service provider Reliance Communications, which is foraying into GSM). The state has about 20 million subscribers and accounts for over 10 per cent of the country's GSM market.

Sources said DoT is expected to issue more spectrum on Friday in Karnataka, Andhra Pradesh, Kerala, Maharashtra, Orissa and Bihar. The government is said to have surplus spectrum in all these circles (or service areas) that can be allocated to new players.

New licensees might have to wait much longer for spectrum in other lucrative service areas like Delhi and Mumbai, however.

This move is significant because DoT delayed issuing spectrum to three incumbent GSM players by over a year. The three "" Vodafone, Airtel and Idea Cellular "" had applied in December 2006. All three have been issued universal access service licences, which allow them to offer both CDMA and GSM mobile services.

The three were allocated spectrum in January 2008, soon after RCom got spectrum in 13 circles to launch GSM services.

"It's really unusual that when we asked for spectrum it did not exist; now suddenly there is surplus available in so many states," said a senior executive of a telecom company.

GSM incumbents complained that their networks are being choked for lack of spectrum, the allocation of which was linked to stiff minimum subscriber criteria last year.

DoT on its part has been pushing the ministry of defence to release additional spectrum of 40 MHz saying there will be no shortage once this is available.

However, due to delays in the project (which requires creation of an optic fibre network for the defence services before they vacate the wireless spectrum) this spectrum might not be available till the end of this year.

Communications Minister A Raja, who set up a team to identify spectrum availability before the 40 MHz is added, has now found large chunks of unused spectrum in various circles.

"The government had thought this spectrum belonged to the defence services but later realised that it was lying there unused. This is the surplus which is being now allocated to the new players," said a telecom expert.