India's Startups in Line for More Spectrum

10:00 AM -- India's Department of Telecommunications is likely to award additional 2G spectrum to the country's startup mobile operators rather than grant more capacity to the incumbents that have been waiting for additional spectrum for almost two years, according to The Economic Times.

The incumbent operators -- including Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Vodafone India , and Idea Cellular Ltd. -- are likely to challenge the decision if the government department goes through with the proposed plan. All of India's operators are finding their 2G operations constrained by a lack of capacity, so any decisions concerning the award of precious spectrum are highly sensitive and usually attract controversy.

Operators that received their licenses in early 2008, such as Etisalat DB (formerly Swan Telecom), Videocon Telecommunications Ltd. , and the GSM operation of Reliance Communications Ltd. , stand to gain, as the proposal involves awarding additional spectrum to those startups that have already received some mobile capacity. (See Indian Gov't Grants Mobile Licenses.)

The idea behind the move is to make existing 2G services more efficient.

But not all the startups will benefit as much as others. Some, such as Uninor and Loop Telecom Pvt. Ltd. , are still waiting for their initial spectrum allocations in some circles, so the new policy, if implemented, wouldn't help them to launch operations in new areas -- in fact, it would put them at the end of the line to get capacity in those circles where they have to launch services. (See Interview: Rajiv Bawa, EVP Corporate Affairs, Uninor and Uninor Commits to India.)

— Gagandeep Kaur, India Editor, Light Reading

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