The Department of telecommunications (DoT) has come out with a confession that the spectrum of 5MHz allocated to foreign players may result in lot of hurdles in their 3G growth. The response has come from the DoT in the wake of a letter shot off by the Minister of state for Communications, Jyotiraditya Scindia making a query on the practicality of 3G services for foreign players.

A minimum spectrum of 10 MHz is required for the actual growth of 3G services. The recently announced 3G guidelines have called for bids for 5MHz spectrum for foreign players. Moreover, a new foreign entrant without a 2G licence would find it difficult to completely migrate to 3G networks though existing operators are expected to manage as they are already present in the 2G spectrum.

In a reply to Scindhia’s letter, DoT has said “It may be mentioned that 15 MHz in 2.1 GHz band is ideally required for 3G services. However, for proper growth, planning of 3G networks 10 MHz shall be for practical purposes needed. As only 5 MHz is presently available and in order to have adequate competition in a service area with 4-5 players, it has been decided to allot 5 MHz”.

Foreign Players were given three options – to apply for Unified access service licence (UASL) for 2G services, to acquire 74% of existing 2G licenses or a merger with an existing player. But no foreign player has opted any of these three options yet.

The DoT had to go through several nightmares with endless opposition, Finance Ministry questioning, GSM, CDMA lobby, mixed opinion among other telecom constituencies. The game is not over yet with this latest development – a letter from a Minister. The DoT has been doing the balancing act with a fair amount of efficiency. It also expects to generate huge revenue from auctioning the spectrum among the global telcos but the reaction of these players is still unclear. X