Reliance Gets GSM Nod

India's CDMA operators, including Reliance Communications Ltd. (RCom) , have been given the go-ahead by the government to roll out GSM services -- much to the chagrin of the Cellular Operators Association of India , which represents the country's GSM-based service providers.

In a statement to the Bombay Stock Exchange Friday, Reliance said it has "received requisite approvals from the Department of Telecommunications to offer GSM services on a nation wide basis under its existing Unified Access Service Licenses."

According to reports, HFCL Infotel Ltd. , an operator in Punjab, and Sistema Shyam TeleServices Ltd. , which operates in Rajasthan and recently sold a stake to Russia's Sistema JSFC (London: SSA), also received approvals. (See Russia's Sistema Buys Into India.) Tata Teleservices Ltd. , India's other major CDMA carrier, did not apply.

Reliance operates India's largest CDMA network, with 30.77 million subscribers nationwide at the end of August, but it also runs a GSM network in eight of the country's 23 telecom regions through its Reliance Telecom subsidiary. Last summer the carrier applied for licenses to extend that network nationwide, and laid out plans to invest $7 billion -- plans that have been on hold while it awaited approval. (See Reliance Dabbling With Dual Networks and Reliance Plans $7B GSM Build-Out.)

Applications for telecom licenses, which are bundled with spectrum, have been held up as the Department of Telecom and the Telecom Regulatory Authority of India (TRAI) consulted on policy rules and have worked with the Department of Defense to come up with a plan to free up some spectrum. (See Reliance Squeezed by Spectrum Crunch.)

The three operators have 15 days to pay a one-time entry fee, the size of which depends on the number of regions they're looking to enter. HFCL will be required to pay 1.5 billion rupees ($37.89 million) for the Punjab region, while a nationwide license would cost 16.6 billion ($419.2 million).

GSM operators, which applied to expand their networks last year, and are still waiting in line for spectrum, have taken exception to the government's decision.

The Press Trust of India reports that the COAI is challenging the decision, and sent a letter yesterday to the telecom secretary claiming that "such crossover/dual allocation of spectrum cannot and should not be permitted. It is submitted that even if the same were to be allowed, it can only be done through change in both policy as well as licence."

In a statement on its Website the Department of Telecom says that "The Unified (Telecom) Access Services (UAS) licenses are technology neutral," and that it's allowing operators to use both technologies "in order to further enhance the penetration of access services for rapid expansion of teledensity."

The COAI is also miffed that the Department of Telecom has approved TRAI's proposals to raise the number of subscribers a GSM operator has to reach before it can receive additional blocks of spectrum, and to remove the cap on the number of operators allowed in each region. (See DOT Updates Policy.)

With the COAI issuing a legal notice to the government last month requesting spectrum, the battle looks set to escalate further. (See Spectrum Fight Escalates in India.)

— Nicole Willing, Reporter, Light Reading

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