3G spectrum will fetch Rs 1,500 cr; Trai makes recommendations

Spectrum for next generation mobile telecom services (3G) will be auctioned and will fetch at least Rs 1,500 crore in one-time acquisition fees and an additional annual spectrum charge of 1% of the gross revenues of telecom operators.

The Telecom Regulatory Authority of India (TRAI) on Wednesday made recommendations to this effect to the department of telecom (DoT). The department had, in a reference made to Trai in May, sought its views on allocation and pricing of spectrum, or frequency bands, for 3G services.

Trai says that its recommendations take care of the issues of affordability of 3G services to consumers, responsible and efficient use of spectrum, and aiding growth of the telecom sector, particularly in rural areas. It said the recommendations are also aimed at promoting competition among telecom players and providing a level playing field among technologies.

Broadly, Trai has recommended that available spectrum be allotted among telecom players for providing 3G services through a “prescribed auction procedure” detailed in its report. Under this, the base price for the acquisition of spectrum for 3G services will be Rs 80 crore for category ‘A’ telecom circles, including Delhi and Mumbai metro, Rs 40 crore for category ‘B’ circles, including Chennai and Kolkata metro, and Rs 15 crore for category ‘C’ cities and circles.

The spectrum for immediate allocation for 3G services, Trai says, should be in 450 MHz, 800 MHz and 2.1 GHz. Present estimates suggest 2 x 32.5 MHz of spectrum will be available in the next six to nine months for 3G services. Five blocks of 2 x 5 MHz in 2.1 GHz band, one block of 2 x 5 MHz in 450 MHz band and two blocks of 2 x 1.25 MHz in 800 MHz band are recommended to be auctioned. This would mean spectrum for 3G services can be availed of by five or even six telecom players in each circle. If there are more players, they will have to wait for availability of more spectrum in the future.

Bharti Airtel chairman Sunil Bharti Mittal has reacted negatively to the Trai recommendations. “The reserve price has been fixed way too high. It will be a serious hindrance in achieving the goal of deeper penetration of telecom services by having lower tariffs. We will appeal to DoT to substantially lower the threshold prices”, he said in a statement.

Reliance Communications, the country’s leading CDMA player, did not react immediately to the proposals, but Tata Teleservices, the country’s second largest CDMA company, was positive. “Trai’s recommendations are fair to all participants in the sector and are progressive in nature. We are happy that the regulator has maintained an evidently technology-neutral approach. The recommendation on pricing and auction of spectrum clearly establishes that spectrum is recognised as a scarce resource and must be utilised efficiently,” said Darryl Green, CEO of Tata Teleservices.

The telecom industry has been a divided house on the norms for spectrum allocation and pricing, with major players Bharti and Tatas pleading their varying points of view before the powers that be, including the Prime Minister. The Trai recommendations, according to industry sources, are an exercise in reconciling these opposing points of view. But clearly, the last word is yet to be said and industry players will now lobby with DoT to influence the final course of spectrum allocation and pricing.

Trai has not taken into account the 1900 MHz, 2.3 GHz, 2.5 GHz and 700 MHz bands for 3G and broadband wireless access services as they are not immediately available and there are technical issues, particularly in mixed band plan. Trai has emphasised that spectrum identified for 3G should be treated as a standalone allocation and not as an extension of earlier spectrum allocation for 2G services.

Trai favours bidding for 3G spectrum allocation

In its final recommendations regarding allocation and pricing of 3G spectrum, the Telecom Regulatory Authority of India has suggested a hybrid model, comprising base price plus auction of spectrum.

The final draft of the recommendations will be submitted on Wednesday to the department of telecom, which has to decide on its adoption.

Initially, only the top five bidders in the auction will get 5 Mhz each of 3G spectrum, since only 25 Mhz is available in the first round. The base price, estimated to be around Rs 200-300 crore per operator, is the cost of reclaiming spectrum from defence services.

Following that, Trai has recommended weeding out non-serious players through auction of spectrum. Though, it will suggest safeguards so that companies do not bid astronomically to garner spectrum. Trai has not recommended extensive qualification criteria since it involves laying down specific guidelines, which could lead to litigations in future.

Regarding the band, the GSM operators are seeking 2.1 Ghz and CDMA ones 1,900 Mhz. Trai is likely to allocate both as per their demands, subject to field trials by DoT, proving that the allocation of 1,900 Mhz to CDMA operators will not interfere with the signals of GSM players. CDMA operators had said they were open to field trials, and the matter is now before the DoT.

Trai has also recommended roll-out obligations for all operators taking 3G spectrum.

DoT had on May 22 sought Trai’s recommendations of 3G spectrum pricing and allocation, following which the regulator came out with a consultation paper on June 12. After inviting comments from stakeholders and conducting open-house sessions, it held in-depth discussions with them.

Industry sources said if the government moved fast on the Trai’s recommendations, the rollout of first 3G services should happen by the beginning of the next fiscal. However, that itself will be a year behind schedule.

Hutch under DoT Scanner

Government has sought information from major cellular operator Hutchison-Essar on under what license the company has offered its push-to-talk service, which was stopped after objections were raised in early 2005, to ascertain whether there was any violation of license.

In a letter, the Department of Telecommunication (DoT) has asked the cellular operator to clarify under what license the push-to-talk service was offered by Hutch group companies.

In fact, last year even the Telecom Regulatory Authority of India (TRAI) had said that Hutch's push-to-talk services were in violation of license and had recommended the DoT to take appropriate action against the company.

Meanwhile, Hutch officials have confirmed the receipt of DoT communication and said that all information has been sent to them.

In similar instance, DoT had imposed a penalty of Rs.50 crore on Tata Teleservices, which had started the service about two years back but had to stop after objections were raised with regards to services viability in terms of numbering plan and payment of Access Deficit Charge (ADC), a levy paid for using other operators' networks.

According to sources, the only difference between Tatas' and Hutch's services was that Tatas offered the service under its Internet Service Provider (ISP) license while Hutch was giving the service under its Access Service License.

DoT has also sought views from the Telecom Engineering Consultant (TEC) to ascertain whether Hutch violated the service license.

As per the DoT letter, the company has been asked to furnish the names of Hutch group companies who had offered Push-To-Talk service along with names of service areas in which the said service was offered. It has also been asked to give details within five days.

HFCL To Manufacture CDMA Products

New Delhi based Himachal Futuristic Communications Limited (HFCL) has secured license from QUALCOMM Inc. to develop, manufacture and sell CDMA2000 terminal devices including handsets, fixed wireless phones and modules.

The agreement makes HFCL the first Indian QUALCOMM licensee, and will be awarded standard worldwide royalty rates. A QUALCOMM license is compulsory for developing CDMA products.

"Having supplied CDMA handsets to Reliance, fixed wireless phones and infrastructure to BSNL, and infrastructure to MTNL, we already know the CDMA market and so wanted to manufacture our own products," said S K. Garg, Business Development Manager, HFCL.

The HFCL manufactured and branded products are expected to go into pilot production by January and commercial production by April. Development - also in advanced stages - is happening in New Delhi in collaboration with consultancy houses, while the production will happen at HFCL plants at Solan near Chandigarh and Chennai, besides being partially outsourced.

Commenting on price competencies, Garg informed that QUALCOMM had a migration program for low cost single chipset solutions, which could drive prices down in the coming quarter. Besides, reduction in various duties, lower cost of production and after sales support would also help drive costs down.

He added that the company expects to manufacture approximately 4 million units, resulting in a turnover of 500 to 600 crores in the coming year.

TRAI Recommendations On AGR

The Telecom Regulatory Authority of India (TRAI) has recommended that revenue accruing both direct and indirect from activities under the Licence should form part of adjusted gross revenue (AGR). The regulator has, at the same time, excluded revenues from verifiable non-licenced activity from AGR.

TRAI has made it clear that proper audit trails should be available for items which are to be excluded from AGR. Besides, revenue from bundled sale of goods and services should be considered as part of AGR unless sale of goods is clearly discernible and services offered remain unaltered even on a stand alone basis.

The regulator has included interest calculated on refundable deposit from subscribers; vendors credit; revenue from rent of towers/dark fibers; payment received on behalf of third parties; sale of handsets or telecom equipment bundled with telecom service; and receipt on account of ADC under AGR.

On the other hand, income from dividend; capital gains unless receipts have come from telecom activities; gains from foreign exchange fluctuations; reversal of provisions; and revenue from discernible and stand-alone sale of handset or telecom equipment which is not bundled with telecom service have been kept out of AGR.

The regulator, in its recommendations, also observed that the definition of AGR along with the `Statement of Revenue and Licence fee' appended to the respective licence agreements would need to be brought in line by department of telecommunication (DoT) with final order of TDSAT.

Book rail tickets via Sify iWay by paying cash

Sify, an Internet and e-commerce services provider, today entered into a tie-up with Indian Railway Catering and Tourism Corporation (IRCTC) to enable customers book rail tickets online against cash payment.

Earlier, e-bookings from IRCTC’s website were available to customers who had a credit card or a net banking facility (cash card option), which limited the e-booking facility to only 25,000 customers.

Customers will now be able to access the service from Sify’s 3,400 iWay cyber cafes across 154 cities in India, Raju Vegesna, MD and CEO of Sify said. "Initially, the online railway ticket services will be available on a pilot basis at around 10 iWays in Delhi with cash payments. We expect the process to be fully operational at all the 3,400 locations within six months."

On the issue of revenue-sharing, IRCTC MD P K Goel said: "A person will have to pay a total surcharge of Rs 40 on second-class, online booking out of which IRCTC would get Rs 25 and Sify would earn Rs 15. In case of II-tier and III-a/c tickets, the charges are Rs 65 of which IRCTC would get Rs 40 and Sify Rs 25. A person can book six tickets at a time with a single payment of surcharge."

The main aim of the initiative, Goel said, is to target people who do not have credit cards or net banking facility. "We expect to sell about one lakh e-tickets through the service in the next six months," he added.

Trai curtails revenue ambit

The Telecom Regulatory Authority (Trai) on Thursday suggested that revenue from discernible and standalone sale of handset or telecom equipment not bundled with telecom service should be excluded from the adjusted gross revenue for the purpose of calculation.

“Sale of handsets or telecom equipment bundled with the telecom service should be part of AGR. It is not to be included in the AGR if there is discernible and stand-alone sale of handset or telecom equipment,” TRAI said releasing its recommendations on components of AGR.

The authority is of the view that service tax is not a revenue for the service provider, which is only a collecting agency on behalf of the government. The inclusion and exclusion of this item should be on accrual basis.

Similarly, the interconnection usage charge (IUC) is a pass-through revenue and the service provider is only collecting interconnect usage charge on behalf of other service providers, therefore, the inclusion and exclusion of this item should be on accrual basis.

The other advantage of allowing accounting of service tax and IUC on accrual basis is that these would be easily verifiable from the annual accounts of the service providers, it said.

Service tax should be shown on accrual basis, both for inclusion and exclusion from the gross revenue for the purpose of AGR. IUC should also be shown on accrual basis both for inclusion and exclusion from the gross revenue for the purpose of AGR.

Even though the income from dividend is part of the revenue it cannot be said to represent revenue from the licensed activity and therefore should not be included in the AGR. As dividend income is separately stated in the annual accounts of service providers, there would be no difficulty in verifying its correctness, it said.

As DoT has already taken a view that receipts from Universal Service Obligation (USO) will not be part of AGR, the authority recommended that necessary amendments should also be carried out in the licence to make it clear. This fund is mainly utilised for the implementation of the government’s recognised projects and policy inducement.

Bharti wins second telecom licence in channel islands

Guernsey Airtel Ltd., a subsidiary of Bharti Global, has been awarded licences to operate 3G as well as 2G mobile services in Guernsey. The Company emerged as the highest-ranking applicant for the licence through a competitive selection process.

Mr. Sunil Bharti Mittal, Chairman & Group Managing Director, Bharti, said “We are extremely delighted at being given the opportunity to provide telecom services in Guernsey. Bharti has been at the forefront of the telecom growth story in India, which is one of the fastest growing mobile markets in the world with over 120 million customers. We are committed to providing world-class telecom services to our customers in the region.”

This is the third international telecom venture of Bharti. In May 2006, Bharti was granted a license to run comprehensive telecom services, including 2G and 3G mobile services and international long distance services, in Jersey through its subsidiary Jersey Airtel Ltd.

Bharti is offering mobile and basic telephone services in Seychelles since 1998 under the Airtel brand through its subsidiary Telecom Seychelles. Airtel has continuously led the market in Seychelles with new products and has played a crucial role in making mobile and landline services more affordable for its customers in Seychelles.

Rel Comm, Bharti in talks to share cell sites

Reliance Communications and Bharti Group are in talks to share about 2,000 cell sites across the country, which will enable the two operators to cut infrastructure costs and provide more affordable mobile services to consumers.

According to sources, both the companies are in advanced stage of discussions and a final decision on the infrastructure sharing could be announced in a couple of weeks.

The number of shared sites could be in the range of 2,000, they said.

The companies would use each other's infrastructure in the country, which will bring down the cost and enable them to offer quality services at further reduced tariffs to the users.

When contacted, reliance officials declined to comment.

In July, Minister for Communications and IT Dayanidhi Maran had unveiled 'project most' in which telecom operators would share passive infrastructure like towers to save significant resources to fund further roll out, enhance aesthetics of the environment and lower the costs per operator.

The project is aimed at lowering the cost of offering services, thereby enabling operators to reduce tariffs further, which would also result in quality of service with lesser call drops as operators use each other's network to reach the remotest part of a city or village.

According to COAI, there are at present 70,000 towers catering to 100 million mobile users and about 1.4 lakh towers would be needed by 2007 at a cost of about Rs 25,000 crore.

Reliance Comm accusations false: VSNL

Following Reliance Communications announcement last week accusing VSNL of delaying implementation of an international tribunal order, Videsh Sanchar Nigam Ltd said the announcement contained false and disparaging imputations against VSNL, which were not justified or supported by facts.

In a filing on the Bombay Stock Exchange yesterday, the company said announcements made by Reliance Communications alleging monopolistic and anti-competitive practices by VSNL indicated a clear malafide on the part of Flag Telecom and RCOM under the guise of a corporate announcement and was done to harm the reputation of the Tata group company.

Last week RCOM had accused the telecom services provider of delaying implementation of International Chambers of Commerce (ICC) Arbitration Tribunal's order allowing landing access to its group company Flag Telecom in Mumbai by taking the matter to a Dutch court.

RCOM had said this move was a violation of the agreement that VSNL had earlier signed with it in this regard.

It had also accused VSNL of delaying implementation of the award with a view to continue monopolistic practices in India, which would harm the ultimate users of international capacity such as ITEs/BPO due to exorbitant bandwidth prices maintained by VSNL.

MTNL withdraws application for ILD licence

MTNL has withdrawn its application to the Department of Telecom (DoT) seeking an international long-distance (ILD) licence on grounds that the existing market did not offer much business opportunities.

The move comes at a time when multinational telecom majors such as AT&T and British telecom are lining up for an ILD licence.Senior MTNL officials said that the company does not need an ILD licence at present and would continue to route its international traffic through private operators.

Company officials said that the withdrawal did not mean that the company was not interested in taking an ILD licence at any point of time. They said that it can re-apply if the business case improves.The ILD segment has players such as Reliance, VSNL and Bharti.

A number of other players have expressed interest to enter the fray to take advantage of the lower entry fees.

Meanwhile, MTNL is going ahead with its 51:49% joint venture with BSNL for laying a submarine cable through Millennium Telecom Ltd, which will oversee the building and operating of the undersea cable business of the PSUs.

MTNL, BSNL joint-venture withdraws long distance application

Millennium Telecom, a joint venture in which Mahanagar Telecom Nigam Ltd has 51 per cent stake with the rest owned by Bharat Sanchar Nigam Ltd, has withdrawn its application for an international long distance (ILD) licence.

“Millennium Telecom has withdrawn the licence application and will not pursue it,” MTNL Chairman and Managing Director RSP Sinha said.

MTNL has already received a letter of intent for its ILD licence.

Instead, MTNL is in the process of amending the companies article, a part of Press Note 5, to seek an ILD licence. Once the amendments are approved, MTNL will pursue the licence application.

Industry experts say BSNL already has an ILD licence, so it does not make sense for it to be part of another company. Also, the department of telecommunications is unlikely to give a licence to the joint venture if one of its constituents already has an ILD licence.

BSNL and MTNL have tied up to lay an undersea cable line to connect South East Asia and West Asia.

All operators had their own undersea cables and it made sense for the government operators to have their own, Sinha said.

VSNL, Reliance trade charges over landing station dispute

The long-standing spat between Tatas and Reliance on landing stations today reached at its peak as both the firms made allegations against each other over the issue of landing charges and an international tribunal verdict.

In a communication sent as a retaliatory disclosure to VSNL`s last week notice to the stock exchanges, Reliance said that the writ filed by VSNL was aimed at maintaining monopoly in Indian market.

Meanwhile, countering the reliance arguments, VSNL said the company firmly believed that the Netherlands court was really the right authority to decide what is permissible under Dutch law.

"Its unfortunate that the stock exchanges are being used to make baseless allegations. VSNL maintained that its bandwidth prices have always been reasonable and even more so after its recent reduction by up to 40 per cent," a VSNL spokesperson said.

Meanwhile, in its communication to the exchanges, Reliance said: "This action of VSNL is designed to delay the implementation of this award with a view to continuing its monopolistic and anti-competitive practices in India which will harm the ultimate users of international capacity such as ITES and BPO etc due to exorbitant bandwidth prices maintained by VSNL.”

The international tribunal in its award in may this year, directed VSNL to grant access to flag to the Mumbai landing station besides an upgrade of the cable system and access charges that are "fair and reasonable".

In Mumbai, Tata Tele tops in customer satisfaction

In Mumbai, only Tata Teleservices has passed the customer satisfaction test among mobile service operators, according to a survey by an independent agency TUV South Asia.

TUV was engaged by the Telecom Regulatory Authority of India (Trai) for assessment of quality of service offered by various mobile and basic phone operators.

Customers are the least satisfied with Hutch in Mumbai.

In Delhi, however, only Bharti and Hutch have attained the overall customer satisfaction level. The dissatisfaction level of Delhiites is the highest for MTNL mobile.

In Kolkata and Chennai, no operator has been able to meet the grade as far as customer satisfaction goes.

In A circle, Maharashtra is the only state where all the operators have met the customer satisfaction level, while in Gujarat none made the grade.

In B circle, only Idea in Kerala and Reliance in Punjab have emerged successful in customer satisfaction. In West Bengal, most operators have scored low in customer satisfaction benchmark.

In C circle, none of the operators has achieved the benchmark.

In network performance, again, Tata Teleservices (Mumbai) is the only player to meet the benchmark in metro circles.

In A circle, none of the operators meet the criteria. But, Maharashtra is better than the rest. In B circle, again, none makes the mark, though Punjab and Haryana show better results than the rest. In C circle, only Bharti in Himachal Pradesh has made it to the successful list.

In the case of billing satisfaction, all operators have qualified for pre-paid in the metros, except Bharti in Mumbai and BSNL in Kolkata. In the case of post-paid, only MTNL Delhi has failed to make it, among the metros.

DoT allots spectrum to 4 GSM players

The dry-run for roll-out of 3G mobile services is finally taking off, as the government has provided low-power spectrum to GSM players like BSNL, MTNL, Bharti and Hutch to carry out interface check on a non- commercial basis.

Spectrum for carrying out 3G trial has not been given only to PSUs, but to all who had applied under the National Frequency Allocation Plan on the 2.1 Ghz band, a senior Deprtment of Telecom official said.

The trial spectrum has been given for one month and is 1/1000 of the actual 3G spectrum capability. It has to be used in a closed campus to see inter-operability of the interface with the existing system and is only for technical demonstration, the official said.

Some time ago, vendors had also asked for the 3G trial spectrum and we had given it and now whichever service provider seeks it under the NFAP, we give it, said the source.

As far as CDMA players are concerned, while Tata Teleserivces had sought 3G trial spectrum, it did not get it. On Reliance Communications, the official said, their case could not be considered as they had sought spectrum on 1900 Mhz band, which did not conform to the NFAP for their CDMA based 3G trials.

But if they (Reliance) ask us for spectrum on the 800 Mhz to carry out trial for EVDO (a version of 3G service for CDMA), we will consider their case, said the source.

Reliance officials, however, declined to comment.

GSM players operate on 900 and 1,800 Mhz while CDMA players operate on 800 Mhz. As for NFAP, 1,900 Mhz cannot be used for commercial purpose and DoT is still undecided on its allocation.

DoT gives spectrum to BSNL for 3G

The Department of Telecommunications (DoT) has quietly allocated scarce spectrum to state-owned Bharat Sanchar Nigam Nigam (BSNL) to conduct experiments in 3G, an advanced telecom standard for carrying data and visuals at a high speed.

The out-of-turn allocation could give BSNL an unfair advantage over private telecom players, which want to launch similar services. The allocation of spectrum was mentioned in a ministry of communications & IT paper and notice that called for a meeting to discuss various spectrum related issues.

The note names only BSNL as the receipient of 5 + 5 MHz spectrum in the 2 GHz band for carrying out experiments in Pune, Chandigarh, Kolkata and Coimbatore. Experiments will be conducted by 3G equipment vendor Nokia for BSNL.

Spectrum is variuos frequency bands in which telecom companies operate. Spectrum bands required for wireless telephony are scare in India as most of it is occupied by defence and other government agencies.

Telecom companies want additional spectrum to improve the quality of services and also to launch 3G services, which will bring high-end video and data services on the mobile phone.

Most telecom companies had, over the last six months, made applications for allocation of spectrum for 3G experiments along with equipment vendors like Ericsson and Lucent.

The applicants included companies that use two dominant mobile technologies GSM and CDMA. However, the allocation of 3G spectrum to BSNL is expected to favour the GSM players.

Industry sources say that BSNL is expected to conduct its experiments with Nokia equiment. The experiments will involve testing transmission and other equipment in Indian conditions and standardising components.

In this case, Nokia will plug in its equipment into BSNL's network and run demo services with limited users to iron out glitches before large scale deployment. The process could take between 6-8 months.

As the DoT will allocate 3G spectrum simulteaneously to various telecom companies, BSNL could have a lead in launching its services. Since Nokia is also an equipment supplier to nearly all GSM-based mobile operators, companies like Airtel and Orange will also gain indirectly due to DoT largesse to BSNL.

Reliance could also benefit if it manages to get spectrum for its proposed GSM services. Says a telecom expert, "Government's move is tilted in favour of the GSM players. It is an unfair move which will kill competitive technologies."

Biggest losers will be Reliance and Tata, two large CDMA service providers. Though there are competing 3G technologies in CDMA and GSM, the ones offered by the CDMA have been found to be much more superior.

BSNL wakes up to subscriber loss

Concerned with the loss of one crore basic phone subscribers, telecom PSU Bharat Sanchar Nigam Limited (BSNL) is planning to launch a series of measures to make basic telephony attractive.

This move follows several reports on the loss in subscriber numbers.

“The officials had convened a high-level meeting to discuss the loss on the subscriber numbers and is taking strict measures to improve its services. However, the reason stated on high rental by most of the subscribers was objected by most of the officials in the meeting. AK Sinha, chairman and managing director, BSNL stressed on making the services more attractive to meet the competition and arrest subscriber loss,” a source said on condition of anonymity.

According to a survey, since 2002, BSNL has failed to retain its subscriber base. Phone surrenders including both of BSNL and MTNL in 2002-`03 totalled 18 lakh, which further increased 32 lakh in 2003-`04. In 2004-`05, 34 lakh BSNL customers followed suit and 36 lakh customers in 2005-`06, leading to a significant decrease in its customer numbers.

“BSNL has been concentrating more on expanding its mobile services in the interior locations of the country which has affected the growth of basic telephony. But we are taking a different strategy this time. We will also be concentrating on improving the services of basic telephones,” the source added.

However, in order to attract its subscribers to its network, the operator has finalised a brand building of its entire services portfolio to hold on to customers in the face of intense competition from rivals. The company has already roped in some of the biggest agencies like Grey Worldwide, Euro RSCG and Media Direction (the media arm of RK Swamy BBDO) to strengthen its mobile, landline, WLL and broadband services brands in all telecom circles.

The advertising agency Euro RSCG will take care of the re-branding of landline and broadband services. It is planning to spend Rs 450-500 crore over the next two years on advertising and image building campaigns.

TRAI says ‘no’ to revenue share on roaming calls

In a major setback for Bharat Sanchar Nigam Ltd (BSNL), the Telecom Regulatory Authority of India (Trai) on Monday disallowed additional revenue sharing between visiting network and terminating networks for roaming calls.

At the same time, Trai expressed its concern about the high roaming tariff prescribedby some operators and indicated that it may review the present roaming tariff regime.



After issuing a consultation paper and discussing the issue, Trai said there is no justification for a revenue sharing arrangement among operators for roaming calls. The regulator also reconfirmed its earlier decision that the terminating operator should get only the prescribed termination charge.

While roaming, if an operator terminates its subscriber calls on another network, it pays the terminating network 30 paise per minute as termination charges. However, BSNL wanted a revenue share agreement over and above the termination charge on the ground that some operators treat the roaming subscriber differently from its own subscriber and charge higher, which is not cost-based.

BSNL urged Trai to fix the amount to be paid by the visiting network operator to the terminating network operator because with the multiplicity of operators, the chances of negotiations succeeding in this regard are remote and may lead to litigations.

Rejecting such demands, Trai observed that in case the termination charge is allowed to be linked with tariff and any additional amount over the specified termination charge is permitted for roaming calls, it may lead to higher roaming tariffs to consumers.

India's top CDMA cellular provider seeks rival GSM

India's top CDMA-based mobile services provider, Reliance Communications Ltd., has sought the rival GSM spectrum from the government for future expansion, the company said on Friday.

The move comes in the wake of differences between Reliance and CDMA technology giant Qualcomm over royalties the U.S.-based firm charges on handsets.

Qualcomm has faced criticism from carriers in emerging markets over what they say are high royalty charges on CDMA technology for which it is the sole supplier.

"The move is in line with our enchanced focus on GSM. However, it is clear that the company will continue with its emphasis on CDMA and deploy GSM for future expansion as is being done by many global operators," Reliance said in a statement.


Reliance has sought GSM spectrum in 21 of the 23 zones or circles that make up the telecoms market. Each zone is equal to a large city, like Delhi, or a big state such as Maharashtra in western India.

Reliance Communications, which has a total of 25.7 million users, already runs GSM networks in 8 of the 23 circles.

The number of CDMA users that Reliance has stood at 23 million at the end of August. The rest are GSM subscribers.

Reliance Communications competes mainly with Bharti Airtel Ltd., India's top mobile services provider and a GSM user, state-owned Bharat Sanchar Nigam Ltd. and Hutchison Essar Ltd. All three have extensive GSM networks.

With 112 million wireless customers growing by more than 5 million a month, India has emerged as the world's fastest growing mobile services market.

Anil ups telecom stake to 66%

Following a restructuring of Reliance Communications’ shareholding, chairman Anil Ambani’s stake in the company has shot up to 66.62 per cent from 39.72 per cent as of March this year, catapulting his networth to Rs 41,500 crore in the telecom company alone.

he reorganisation move, which was initiated in March has been completed in less than 6 months while making Reliance Communications (RCoM) as the primary operating company for the entire telecom business of the group.

Under terms of corporate reorganisation, new equity shares of the company are being issued in exchange for Ambani’s direct equity shareholdings in RIC, RCIL and RTL and as consideration for the properties.

R-ADAG had received control of RCoM in February this year after the demerger scheme became effective in December last year.

An Ambani statement said the earlier equity structure had significant drawbacks with regard to resource mobilisation, transparency and valuations. Post-reorganisation, retail investors hold 12.93 per cent while foreign investors — FIIs, NRIs, GDRs and others own 14.15 per cent stake in the company. Domestic institutions, banks and mutual funds hold 6.3 per cent stake.

Following RIL’s de-merger, RCoM held 45.34 per cent of Reliance Infocomm (the CDMA venture) which in turn held 100 per cent of Flag Telecom. RCoM owned 45 per cent of Reliance Communications Infrastructure and 35.60 per cent of Reliance Telecom (the GSM venture) after the demerger.

RCoM said it has now become the primary operating company for the entire telecom business. The company and its wholly-owned subsidiaries own 100 per cent of the networks, facilities, licenses and properties used in its business.

These include the nationwide CDMA and GSM wireless networks, the national and intra-city fibre optic networks, the FLAG and FALCON global submarine cable systems, the Reliance World retail chain, the internet data centres, contact centres, network operating centres, and other facilities used in these businesses.

‘‘The entire shareholdings of the promoter group in certain affiliates will stand exchanged for equity shares of the company, thereby providing a simple and transparent ownership structure, and completely aligning the interests of the promoter group with over 2 million shareholders of the company,’’ a statement said.

Reliance Comm applies for GSM

Signalling a full-blown entry into GSM mobile services across India, Anil Dhirubhai Ambani Group company Reliance Communications has applied for spectrum in 21 circles under the Unified Access Service Licence.

The company, which is a leading player in mobile space, sent in its application to the Department of Telecom's spectrum wing — Wireless Planning Coordination (WPC) — last week.

Reliance Communications, which already offers GSM services in five circles under the previous Cellular Mobile Service Provider licence regime, had in June applied for GSM spectrum in six circles, including Delhi and Mumbai.

Its present application seeks spectrum under the Unified Access Service Licence for 21 of the 23 circles in India.

Applications have not been made for north-east and Assam citing the neglibile size of the market and also due to the company's presence in these circles in the CDMA space. When contacted, a DoT official said some documents regarding spectrum have come to the WPC, but he declined to divulge the details.

The telecom service provider, which has over 20 million CDMA-based mobile subscribers, has been seeking to expand services on the GSM front for a while now. Earlier, DoT had asked it to furnish details of its business plans and spectrum needs for the circles applied for.

When contacted, Reliance Communications officials said that the move was in line with their enhanced focus on GSM.
Reliance, in its application, said that the UASL licence was technology neutral and operators are allowed to use any technology for providing access service.

It cited the example of BSNL and MTNL, which are using both GSM and CDMA technology for providing mobile services. It is clear that the company would continue their current focus on CDMA and would deploy GSM for future expansion, like in case of many global CDMA operators who are using GSM for future expansion.

Reliance Comm enters into a tie-up with Nokia

Reliance Communications entered into a tie-up with Nokia to market 'Nokia 1255' mobile handsets across the country at a price of Rs 1999, which is targeted at first time mobile users.

"This initiative will provide a new impetus to the burgeoning Indian telecom market by providing consumers a high quality mobile experience at an affordable price level", Reliance Communications CEO Sajive Kanwar said.

With this partnership with Nokia, we are expecting to sell about 2 million handsets in the next six months, Kanwar said.

Nokia sales director Sunil Dutt said, "this offer will help our company to enter the emerging markets by providing consumers affordable solutions."

MTNL, BSNL in tie up to lay sub-sea cable system

MTNL and BSNL have united to lay a submarine cable system to connect India to South-East Asia and the Middle East.

The cable system will provide international bandwidth to the countries which will serve their own and other commercial requirements.

The ultimate intent of the cable system is to eventually extend to the US and Europe, Union IT and Communications Minister, Dayanidhi Maran said.

If Middle East countries bring down the landing costs of submarine cable, bandwidth prices could be slashed as a result, Maran said.