India's Department of Telecom grants mobile licenses to nine companies, including telcos and industrial conglomerates

January 11, 2008

3 Min Read
Indian Gov't Grants Mobile Licenses

Faced with a stack of applications for mobile licenses and months of squabbling between carriers, India's Department of Telecom has decided to grant them to everyone who got their paperwork in by last year's deadline.

A total of 46 companies had applied for universal access services licenses (UASL) by October 1, after which point the government said it wouldn't accept further submissions. (See Spectrum Fight Escalates in India.) But now the Department of Telecom says it's using September 25 as a cutoff point, and any applications received after that will be considered at a later date.

Of those companies, which included not just telcos but industrial conglomerates and real-estate developers, nine have been declared eligible for licenses in some or all of India's 23 telecom "circles," or regions.

In a statement, the Department of Telecom said it had accepted the Telecom Regulatory Authority of India (TRAI) 's recommendation that "no cap be placed on the number of access service providers in any service area" to encourage increased competition and quality of service. Each circle is presently being served by three or four mobile operators.

Among the telcos, Idea Cellular Ltd. , Spice Telecom , Sistema Shyam TeleServices Ltd. , and Tata Teleservices Ltd. have received so-called letters of intent, which require them to pay a license fee before they can get in line for wireless spectrum.

New entrants include real-estate developer Unitech, Swan Communications, S Tel, BPL Mobile subsidiary Loop Telecom (formerly known as, and Datacom -- part of industrial conglomerate Videocon, which has formed a joint venture with Verizon for long-distance services. (See Verizon Receives India Licenses.) Of those companies, Swan received letters of intent for 14 circles, while the others each received 21 or 22, effectively paving the way for them to become national operators.

A universal access license means that Tata Teleservices will be able to join fellow CDMA operator Reliance Communications Ltd. (RCom) in offering GSM-based services. (See Reliance Gets GSM Nod.) Universal access licenses allow the operator to launch mobile services on either GSM or CDMA networks, and also offer VOIP and Internet services.

IDEA Cellular, which operates in 11 circles, stated in an announcement to the Bombay Stock Exchange Friday it's received approval to enter nine new markets. The carrier added that it "intends to roll-out services in all the above Service Areas as soon as spectrum is made available."

Spice Telecom, which operates in the states of Punjab and Karnataka, had applied for licenses in 20 circles but according to its stock exchange filing received only four on the grounds that it failed to meet net worth requirements. Telekom Malaysia, which holds a 49 percent stake in Spice, has asked the government to take another look at the applications taking its larger net worth into account.

Operators will have to pay INR16.5 billion (US$419.9 million) for nationwide licenses, and less for a smaller number of circles. Once the fee has been paid, they will receive spectrum on a first-come, first-served basis. Reports suggest that as well as sending out the letters, the Department of Telecom has allocated spectrum to IDEA Cellular, Vodafone India , Aircel Ltd. , and Reliance, which have been waiting in line for months.

— Nicole Willing, Reporter, Light Reading

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