With Reliance’s application for GSM spectrum, the war has intensified further. Some pointing that the spectrum allocation policy by DOT is totally flawed. Lets try to understand what the current policy is.

GSM operators have been allocated spectrum in the ranges of 890-902.5 MHz paired with 935-947.5 MHz and 902.5-915 MHz paired with 947.5-960 MHz. This gives the GSM operators total of 25+25MHz. CDMA operators have been allocated 824-844 MHz/869-889 MHz 20MHz+20MHz. DOT reasoning was that CDMA operators were more efficient in using the same and hence slightly lesser. Operator who adds more number of subscribers can get more spectrum.

While in most other countries, spectrum is auctioned off when a mobile license is provided. This helps in efficiently deploying and using the network. However, in India, due to severe crunch(Defence & Military holds the Majority), DOT awarded initial spectrum upong issuing a license and upon request additional allocation was made. Also DOT favored GSM over CDMA because the latter networks were more efficiently using the same. TRAI in its recommendations had asked DOT to have a technologically neutral approach while allocating the spectrum.
Insiders learn that Qualcomm executives will meet Telecom Minister, Mr. Maran. However, Maran is bent upon forcing Qualcomm to cut the roylaty charged to Indian CDMA operators on equipment and handsets which is abnormally high in India.

Why did this WAR breakout ?
GSM in India currently runs on 2G networks. With demand for value added services on mobile phones, networks have to be upgraded to 3G. For GSM operators W-CDMA a technology developed by NTT DoCoMo is the natual choice and migration path is also easier with the availablity of multiple equipment vendors. For CDMA vendors they have to migrate to CDMA-2000 to provide 3G equivalent services. The migration path for CDMA vendors can prove to be little bit expensive.

Qualcomm executive Mrs. Singh adds that,

  • All royalty charges are levied directly by equipment and handset manufacturers.
  • Primary challenge for CDMA operators in India is lack of spectrum. Current Indian regulatory policy favours GSM by making significantly more spectrum available for them.

Mr. Singh, instead of pointing fingures at Handset & Equipment manufacturers, take a lead and convince your San Deigo management to cut royalties.

It is likely that, TRAI & DOT will adopt a technology neutral approach while awarding 3G spectrum, but that may not stop Reliance to backout from CDMA.