CDMA players at an advantage, says GSM body

Incensed by allegations that GSM players were being favoured in allocation of spectrum, industry body COAI today claimed that rival CDMA players were in fact the real beneficiaries as they enjoyed very low entry fee and annual spectrum charges.

"We respectfully submit that the truth is, in fact, the exact opposite, since the CDMA operators not only have a huge initial advantage over GSM as a result of paying a lower entry fee, but also continue to enjoy an enormous ongoing advantage in terms of lower annual spectrum usage charges", COAI said in a letter to Telecom Minister Dayanidhi Maran.

It said when CDMA operators migrated to full mobility through the package worked out under the Unified Access Licensing regime, they paid only the differential amount between the FSP entry fee and the value of the 4th GSM licence and in this transaction, they obtained access to mobility spectrum that had, admittedly, five times higher capacity than GSM.

"This effectively means that CDMA operators actually paid only around one-fifth the price that the spectrum/licence would have attracted if the same had been acquired in the open market", the letter said.

Spectrum charges are recovered from operators as a percentage of revenues that are earned by them.

Given this principle, it was most incorrect and unfair that the same quantum of revenues attracted different rates of tax in the hands of GSM and CDMA operators, it added.

Elucidating the points, the association said for the revenues generated from a subscriber base of 10 lakhs, GSM operators paid a usage charge of 4 per cent while for the same quantum of revenues/subscriber base, CDMA operators paid only 2 per cent.

This anomaly needs to be corrected and equivalent revenues should attract equivalent charges from all operators.

The association further submitted that notwithstanding the 5:1 capacity advantage of CDMA, the license contracts signed by CDMA operators prescribe a very lenient 1:2 linkage between CDMA and GSM spectrum, it said.

COAI cited a clause of the UAS license that says if an operator chose GSM (TDMA), he would get an initial maximum allotment of 4.4MHz and if he choses CDMA, he would get an initial maximum of 2.5MHz.

The licence also clearly states that the licensee has to indicate his choice of technology based on which the "appropriate" spectrum will be allotted.

"Under the above circumstances, it is submitted that the CDMA's demand for equal MHz spectrum is completely untenable.

Further, it is mandated under licence that CDMA operators should optimally utilise their existing allotments before seeking additional spectrum.

"It is estimated that they have at least 40 per cent spare capacity within the already-allotted spectrum. The fact that they have deployed far fewer sites is clear testimony to this fact", it said.

COAI also said it is a misnomer that additional/equal MHz spectrum is necessary to help bridge the digital divide through data services.

"There is absolutely no paucity of spectrum in the rural areas and in fact, the spectrum in these areas is going waste as it is not being utilised adequately by the mobile operators...", it said.