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Tata delivers spectrum punch

New Delhi, April 25: Ratan Tata, chairman of the Rs 80,000-crore Tata group, has questioned the government’s policy of allocating spectrum based on subscriber and technology.

Spectrum is the band of radio frequency allotted to telecom companies, which helps them carry telephone calls.

“The department of telecom (DoT) order prescribes standalone subscriber base threshold levels and technology-based spectrum allocations on a free basis. These do not appear to be part of a publicly defined spectrum policy,” Tata said in a communication to the government.

The DoT has announced new subscriber-based criteria for the allotment of spectrum last month under which allocations will depend on the size of an operator’s user base in a circle.

Spectrum is a scarce commodity ' and telecom companies have been squabbling over allocations for several years. The government has allotted niggardly amounts to telecom companies since the sector was opened up in 1993.

If the DoT was expecting the war of words to die down after its recent announcement, it hasn’t happened. If anything, the cacophony has just got louder.

Under the existing system, frequencies are allotted in the range of 2.5 MHz to 5 MHz for CDMA players, and 4.4 MHz to 8 MHz for GSM companies.

The new policy has prescribed minimum subscriber numbers for raising CDMA spectrum to levels beyond 5 MHz to 6.25 MHz and 7.5 MHz. For GSM players, levels beyond 8 MHz would be 10 MHz, 12.4 MHz and 15 MHz, depending on user bases.

Additional spectrum allocation will depend on the number of users in a city if it is a metro, and in a circle if it falls within the A, B or C category states.

For metro service areas ' Delhi, Mumbai, Chennai and Calcutta ' a CDMA player must have at least 16 lakh subscribers to be eligible for 6.25 MHz and 21 lakh customers for the 7.5 MHz respectively.

A GSM operator must have 3 lakh users in the metro circles to be eligible for 6.2 MHz spectrum; 6 lakh for 8 MHz; 10 lakh for 10 MHz; 16 lakh for 12.4 MHz and 21 lakh for 15 MHz.

This means that in Delhi, GSM operators Bharti and Hutch, both of whom have a subscriber base of more than 16 lakh, will be eligible for 12.4 MHz.

However, Idea Cellular has a much lower subscriber base in Delhi and will, therefore, be eligible for spectrum of 8 MHz.

Tata has raised a serious issue of “self-proclaimed subscriber base” by every individual service provider and objected to the DoT’s order of allocating spectrum on such basis without an established mechanism for verification.

“The policy also specifies a cut-off level of subscriber size for eligibility of additional spectrum, without any recognition given to the relative years of operations of respective providers,” Tata said.

The different yardsticks adopted for allocation of spectrum to GSM and CDMA operators have also been questioned.

“This is irreconcilable, particularly in an industry where new developments and technologies will be introduced continuously, which will have higher capabilities, greater cost-efficiency and lower cost than existing technologies,” he added.

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