COAI, which represents the GSM industry, may move the telecom dispute tribunal-TDSAT-over the recent recommendations on licensing norms issued by the regulator.
To challenge higher subscriber criteria for spectrum allocation
NEW DELHI: Cellular Operators Association of India (COAI), which represents the GSM industry, may move the telecom dispute tribunal-TDSAT-over the recent recommendations on licensing norms issued by the regulator. COAI's primary objection in the Trai recommendation is to the higher subscriber criteria for spectrum allocation to mobile phone operators.
COAI representatives said all options were being explored.
It is believed that large GSM players would be hit the most by the Trai recommendations on spectrum allocation. Market leader Bharti is learnt to be critical of the regulator's recommendations, with company sources suggesting that the consultation process at Trai did not discuss the higher subscriber criteria for spectrum allocation.
There are chances that TDSAT dismissing the COAI appeal, as the Trai recommendations have not been translated into a government policy yet.
Sources at the Association of Unified Service Providers of India (AUSPI), representing CDMA (code division multiple access) players said, "we don't have any plans for legal action against the Trai recommendations at this point."
Trai has now increased the number of subscribers required for getting additional spectrum, thereby making many existing operators ineligible for more spectrum. Hence, it's advantage new players.
A CLSA report indicated that the GSM industry may oppose the recommendation due to the revised subscriber-related spectrum allocation norms. "Bharti, which was eligible for additional spectrum beyond 10 mega hertz in 14 out of 23 circles, would now qualify for additional spectrum in only four circles," it said. Also, the additional charges and a one-time levy for spectrum beyond 10 mega hertz would raise the cost of GSM service and adversely affect their margins, the report added.
However, predicting that Bharti would be a key winner in the next three to four months, a Morgan Stanley analyst report said the expectation stems from the fact that "since it has a higher subscriber base, it could get incremental spectrum in five circles." According to the Morgan Stanley report, Reliance Communications would get additional spectrum in two circles and Vodafone in one.
Trai issued its recommendations on licensing conditions last Wednesday. While not imposing a cap in the number of operators, it increased the cross-holding limit from 10 to 20% in case of merger. Trai has imposed a one-time fee for spectrum allocation beyond 10 mega hertz. It also enhanced the present subscriber norms. That is, if now, a GSM operator requires 2.1 million subscribers for allocation of 15 mega hertz of spectrum in Mumbai and Delhi, the Trai recommendation states that the subscriber number should be at least 5 million for the same quantum of spectrum in these cities.
Similarly for CDMA, the subscriber criteria has been raised from 2.1 million to 5 million for 7.5 mega hertz of spectrum in Mumbai and Delhi.
Also, it has favoured access providers using combination of technologies, though at a price. It even lowered the limit of market share of merged entity from 67 to 40%.
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