New generation

New Delhi, March 25: The Telecom Commission, the apex body of the department of telecom (DoT), has cleared a policy on third generation (3G) mobile services rollout.

According to the policy, 3G radiowaves will be auctioned in tranches of 5MHz to service providers that win the bid to roll out these services.

The commission has also decided to reserve a slot in each circle for the two PSU telecom players — Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) — which would not have to bid in the auction process but would have to pay a price equal to the highest bidder to get 5MHz of 3G spectrum.

Initially, the government will dole out 30MHz of 3G spectrum, including the 5MHz reserved for BSNL and MTNL. This means a maximum of five telecom players can bid for a 3G licence as each successful bidder will be given 5MHz spectrum in the 2.1GHz band.

The Congress-led government plans to roll out 3G mobile services from April, ahead of the release of extra spectrum for telecom companies for 2G services.

“As the Telecom Commission has finalised the guidelines, the matter will now be taken up with the political leadership for clearance,” said officials.

3G services will bring in high-speed broadband connectivity on mobile handsets. This will set the stage for data services such as video on demand and mobile TV.

Operators also need 3G spectrum as it can accommodate more users in a lesser bandwidth compared with existing mobile technologies. The commission has also decided to allow existing operators as well as new players and foreign telcos to bid for third generation frequencies during the auction.

Existing CDMA and GSM players are against the entry of foreign players in 3G. They have written to the DoT threatening legal action if new players are allowed to participate in the auction.

Industry analysts said as 3G spectrum could be used both for voice and high-speed data applications, many foreign operators could consider this route to enter the traditional voice and SMS segment, which is now offered through 2G spectrum.

However, DoT officials said foreign players were most likely to form alliances with existing telecom operators to bid for 3G licence as that would “enable them to utilise the established infrastructure”.