‘Firms depositing fees first will get radio spectrum’


New Delhi : To what seemed to be the beginning of an end to the current imbroglio over allotment of radio waves to Indian telecom operators, the government introduced another twist saying new entrants will get spectrum depending on who deposited the fee first.

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Communications and IT Minister A. Raja made it crystal clear to the operators on Monday that seniority will be determined on the basis of the time they deposited the required fees after the letters of intent (LOIs) were distributed last week.

This statement of the minister implies that the nine new entrants who received LOIs from the government last week will get the spectrum depending who paid the fee first after collecting the LOI.

This is contrary to what was the practice all this while, under which priority granted in obtaining license was the same for getting the radio waves.

Last week, the government granted 121 LOIs to nine operators, which include four existing players and five new entrants.

The existing players include Idea Cellular, Tata Teleservices, Shyam Telelink and Spice. The new applicants who got the LOIs include Unitech, Datacom, S Tel, Swan Connect Communications and Ruia’s-owned Shipping Stop Dot Com.

With the sudden change in the policy, operators who are at a disadvantage are Idea Cellular and Spice Telecom that had applied for licenses in June 2006 and August 2006, respectively.

On Jan 10, representatives of all the nine firms literally stormed the Department of Telecommunications (DoT) in a bid to be the first in the queue to make the payment of Rs.16.5 billion ($421 million).

Officials of Idea Cellular have urged the government to consider seniority as per the time when the applications were made.

Idea received LOIs for nine telecom circles of Assam, Jammu and Kashmir, Karnataka, Kolkata, North-East, Orissa, Punjab, Tamil Nadu and West Bengal for which it applied.

However, Spice, which had applied licenses for 20 circles, received only four LOIs. The remaining areas were not cleared over its net worth issues, sources said.

Among the new firms that obtained LOIs, Unitech received them for 22 circles, Swan for 13 circles, Datacom for 22 circles, S Tel for six circles and Loop Telecom for 21 circles.