The Indian government has begun the process of allocating spectrum to mobile operators that were recently granted new licenses, starting with CDMA-based operators Sistema Shyam TeleServices Ltd. and Tata Teleservices Ltd.

CDMA-based mobile operators have the advantage over their GSM counterparts when it comes to spectrum availability, because there are more companies vying for a limited amount of GSM frequency as the Department of Telecom waits for defense forces to free up some additional spectrum.

Nine companies, including five new entrants, have received new licenses and applied for spectrum. (See Indian Gov't Grants Mobile Licenses and A Guide to India's Telecom Operators.)

Shyam Telelink, which operates in the Rajasthan circle, or region, has signed licenses for the rest of the 23 regions to become a nationwide player. Local media began reporting yesterday that it has been granted startup spectrum in the North East, Jammu and Kashmir, and Assam circles.

Shyam is still waiting for frequency in the other regions, but it will be able to expand more quickly than if it had waited for GSM spectrum -- which will be allocated on a first-come, first-served basis -- since it was among the last to sign up for new licenses.

Russian conglomerate Sistema JSFC (London: SSA) holds a 51 percent stake in Shyam, and Anton Abugov, vice president and head of strategy and development, has said the company plans to invest $5 billion over the next three years in building out Shyam's network.

Shyam is still likely to seek GSM spectrum, since the government has ruled that under their Unified Access Service licenses, CDMA-based operators can also run GSM networks and vice versa. (See Reliance Gets GSM Nod and Reliance Gets GSM Spectrum.)

According to reports on Friday, Tata Teleservices, which operates in 20 circles, has received spectrum for the same three circles as Shyam, giving it coverage in all 23. Tata is also in the queue for GSM spectrum.

GSM spectrum is in short supply across India, and of the 23 circles, there is sufficient frequency to support new operators in just four -- Tamil Nadu (including Chennai), Kerala, Andhra Pradesh, and Orissa. The government is expected to begin allocating spectrum in those areas this month and wait for the additional frequency from the defense department before tackling the queue for the rest of the country.

— Nicole Willing, Reporter, Light Reading