CDMA hubs to miss next year’s 3G party : ET

CDMA hubs to miss next year’s 3G party 3 Nov 2009, 0342 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: Over 35-million subscribers of Reliance Communications (RCOM), Tata Teleservices and Sistema Shyam (MTS) in Delhi, Mumbai, Maharashtra, Andhra Pradesh, Punjab and Rajasthan may be deprived of third-generation (3G) mobile phone services, with the armed forces turning down a communications ministry demand to release airwaves ahead of the 3G auctions scheduled for mid-January next year. The auctions cannot be held for these regions, as the defence ministry is yet to release CDMA frequencies in the 800 MHz band, said a department of telecom (DoT) official who asked not to be named. DoT has informed service providers that 3G spectrum auctions for CDMA players will not be held in the two metros and four states due to a crunch in airwaves. In all other states, a single slot of 3G spectrum will be auctioned for CDMA operators. Third-generation airwaves allow telcos to offer high-end services such as ultra-fast internet and video conferencing on mobile phones. RCOM and Tata Teleservices did not comment on the likelihood of 3G auctions for CDMA not being held for these areas. Sistema Shyam CEO Vsevolod Rozanov told ET the lack of 3G auctions in these places would deprive CDMA customers of high-end services. “We are in talks with Qualcomm (the technological partner) to see how we can work around this. By increasing the number of cell sites, CDMA operators may be able to provide data services in these regions to their customers,” he added. The two cities, which have a telecom penetration of well over 100%, are considered the most lucrative for telcos. Maharashtra, Andhra Pradesh and Punjab are also rated among regions with high revenue-earning potential. GSM platform to save the day An executive with one CDMA player said the Tatas and RCOM would not be heavily impacted, as they offer services on both GSM and CDMA platforms. “These two operators may base their strategy for providing high-end data services in these regions on the GSM platform. Mobile number portability will allow them to shift their top-end CDMA customers in these regions to the GSM platform,” he said, requesting anonymity. GSM operators will see 3G auctions in all telecom circles, except Rajasthan and the North East. In most circles, four slots of GSM airwaves will be auctioned, except in Delhi and Gujarat where only two private players can be accommodated and in West Bengal, where the auction will be limited to a single private operator. At present, defence forces occupy a bulk of 3G spectrum. Earlier this year, the defence and telecom ministries had signed an MoU, which stipulated that the armed forces will release up to 45 MHz of radio frequencies over a three-year period, of which 25 MHz would be for 3G services. The MoU also added that the defence forces will release two blocks (10 MHz) of 3G airwaves and one block of 2G frequencies immediately while the remaining would be released over a three-year period. But in a recent meeting between the ministries, the defence ministry had said it could not adhere to the time frames mentioned in the MoU as the alternative communications network being built for them by DoT through BSNL & MTNL would be operational only by early 2011.