Idea Cellular backs COAI on licence row

Idea Cellular on Thursday lent support to the Cellular Operators Association of India's (COAI) concern on the recent spate of unified access service (UAS) licence applications.

Idea Cellular managing director Sanjeev Aga described them as "nameplate applications".

"Despite 74 per cent FDI being permitted in the sector, not even one major telecom service provider has made an application," Aga, who was in New Delhi to announce an 'Asia Mobility Initiative', said.

"A nationwide mobile network will take over Rs 20,000 crore to be put up. It is unbelievable for a tenth or a twelfth operator to justify a business case for genuine investment. What is it they see that sober, serious players cannot? Are national interests to be furthered in this manner?”, He asked.

Recent UAS applications to the Department of Telecommunications (DoT) for pan-India coverage were either from unknown entities or non-telecom companies like Swan, Cheetah, Bycell, Alliance Infratech, S Tel, Datacom Solutions and Parsvanath.

It's believed that Anil Ambani's Reliance Communications holds minority stakes in both Swan and Cheetah, while Parsvanath is a real-estate major.

COAI director general TV Ramachandran had already written to the DoT that corporate veils must be lifted while considering applications for telecom licences.

The rush for nationwide licences was triggered by some recent recommendations by the Telecom Regulatory Authority of India (TRAI).

It's decision not to cap the number of operators in a telecom circle while examining it as a solution to the spectrum crunch was the trigger.

TRAI chairman Nripendra Misra said that one of the objectives of the recommendation was to prevent entry barriers in the telecom sector.

On Wednesday, in a legal notice to DoT, the COAI had sought preference for existing GSM service providers in spectrum allocation. It argued in the letter that GSM service providers had been "disadvantaged by the government policy of 2003 from expanding their footprint as desired".