7 telcos get 3G spectrum

Paving the way for launch of third generation (3G) services, which would enable mobile phone subscribers to access the internet and download videos at a much faster pace, the government today allotted 3G spectrum to the winning bidders at the recent auction.

Sticking to the deadline of September 1, spectrum was allotted to the seven winners — Bharti Airtel, Reliance Communications, Idea Cellular, Vodafone Essar, Aircel, STel and Tata Teleservices — after amendments in the licence terms and conditions.

State-run telecom majors Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) were allotted 3G frequency a year ahead of the auction for the private players, but they had to match these winning bid prices in the areas they operate.

With this, the commercial launch of 3G mobile services is expected to happen by the end of this year or early next year. It took over two years before 3G could see the light of the day due to various hurdles ranging from vacation of spectrum to the reserve price of the spectrum for auction.

According to the amendments, the operators would be able to use the 3G spectrum for 20 years starting today. The government has also imposed a roll-out obligation, under which the service providers would have to cover at least 90 per cent of the service areas in the metros within the next five years.

The 3G auction (held in April-May) had yielded Rs 67,700 crore from the winning players, which includes BSNL and MTNL payments. None could bag pan-India 3G spectrum.

The Department of Telecommunications had set the deadline of September 1 for allocating the spectrum, after its vacation by the defence forces. The latter had vacated two slots of 3G spectrum before the auction, while the third was to be released later, in July or August this year.

Bharti Airtel, Reliance Communications and Aircel had bagged spectrum in 13 circles each, followed by Idea Cellular in 11 and Vodafone Essar and Tata Teleservices in nine each. BSNL offers services through the country, except Delhi and Mumbai, wherein MTNL operates.

The operators have been awarded 5 Mhz of spectrum in each winning circle. Three slots were auctioned in 17 circles, while four slots were on block in five circles.

According to the amendment, if the operators fail to achieve the roll-out obligations, they would be given extension for one more year after paying 2.5 per cent of the spectrum acquisition charge per quarter. In case of merger of two companies, only one slot of spectrum can be retained.

The operators will have to pay the upward revised spectrum usage charges ranging between three and eight per cent, depending on the quantity of spectrum held by them.