India Begins Allocating GSM Spectrum

India's Department of Telecom has finally begun the process of doling out GSM spectrum, after months of squabbling among operators as to which should be given priority.

The Press Trust of India news agency reports that spectrum has been allocated in the joint Tamil Nadu and Chennai circle, both to companies that were recently granted new licenses in the region and operators that qualify for additional frequency based on their subscriber counts. (See A Guide to India's Telecom Operators.)

The new players -- Datacom Solutions Pvt. Ltd., Unitech Ltd., Swan Telecom Ltd., Loop Telecom Pvt. Ltd., and operator Idea Cellular Ltd. -- will each receive 4.4 MHz of startup spectrum, while Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and Vodafone India will be allocated additional spectrum.

Regional operators IDEA Cellular and Spice Telecom have challenged in court the government’s policy of awarding spectrum based on when it received payment of license fees, since they had applied for permission to expand into new regions before companies like real estate player Unitech decided to enter the market.

The Department of Telecom is trying to avoid that fight by starting with regions where there is enough spectrum to accommodate everyone that has applied for it. Those regions include Kerala, Andhra Pradesh, and Orissa.

In the CDMA space, Rajasthan-based operator Sistema Shyam TeleServices Ltd. has been granted spectrum in eight new regions -- Andhra Pradesh, Tamil Nadu and Chennai, Haryana, West Bengal, Himachal Pradesh, Bihar, Uttar Pradesh, and Chhattisgarh. (See Shyam Adds More Spectrum.)

That’s in addition to the spectrum it received in the North East, Jammu and Kashmir, and Assam circles earlier this month. (See Shyam, Tata Score CDMA Spectrum.)

Shyam was among the regional players given licenses to expand its coverage to all 22 licensed circles, and is now waiting for spectrum in the ten remaining.

Russia’s Sistema JSFC (London: SSA), which holds a 51 percent stake in the operator, is planning to raise its ownership to 74 percent, and invest $1 billion to have the extended network up and running in the new regions by the end of the financial year. It also intends to apply for nationwide GSM spectrum under a ruling by the government that allows operators to run dual networks.

— Nicole Willing, Reporter, Light Reading

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