The government on Tuesday started allocating GSM spectrum to new telecom players, commencing with the Tamil Nadu circle including Chennai, in a move that would infuse more competition in the mobile telephony space.
Five new players -- Videocon-promoted Datacom, Idea Cellular, realty major Unitech, Swan Telecom and Loop Telecom -- have been given start-up 4.4 MHz GSM spectrum in Tamil Nadu circle, official sources told PTI.
Officials of Cellular Operators Association of India (COAI), the lobby group of existing GSM players, could not be contacted for comments.
Sources said that Communication and IT Minister A Raja on Tuesday signed the file giving the green signal to allocate GSM radio frequency to new players.
The department of telecom (DoT) is also looking at other circles where spectrum is available in abundance and can be allocated to all the aspirants simultaneously.
Some of the players, especially Idea Cellular and Spice Communications, had questioned Raja's first-come-first-serve policy to allocate spectrum, saying this should be done on the basis of application and not the payment of required fees. However, Raja's decision to give spectrum to all at one go would silence critics.
Besides Tamil Nadu, according to sources, spectrum for all is available in circles of Andhra Pradesh, Karnataka, Kerala, Orissa, Bihar, Madhya Pradesh and Kolkata and the minister may distribute it soon.
As per the feasibility carried out by DoT, spectrum is scarcely available in densely populated circles like Delhi and Mumbai and the government can accommodate only one more player in each of these circles.
This could delay the process of allocating spectrum in these circles and some of the states near international borders like Rajasthan, Punjab, Himachal Pradesh and Jammu and Kashmir.
Meanwhile, the government is also continuing discussions with the defence ministry for vacation of unutilised spectrum, which could be used partially for existing 2G services and the remaining for next generation 3G mobile services.
One of the new players Shyam Telelink, which has partnered with Russian telecom giant Sistema, has already been allocated CDMA frequency in 13 circles.
DoT officials said the new players should take nine to 12 months to roll out networks and once they start services the mobile tariffs should come down by at least 50 per cent from the current level.