In a sharp criticism of operators of global system for mobile communications technology who have complained of spectrum shortage, Reliance Communications [Get Quote] has written to the Telecom Regulatory Authority of India saying inefficient utilisation, and not shortage, could hamper growth.

The country's largest operator of the rival code-division multiple access technology has also suggested that GSM operators are hoarding spectrum and not making fresh investments for expansion on the specious grounds that return on capital is poor.

In its reply to Trai's consultation paper on new licence norms, RCom said GSM operators served 135 million customers with about 37.2 MHz spectrum, which translated to 3.62 million subscribers per MHz. In comparison, China serves 425 million GSM customers with 50 MHz spectrum or 8.5 million subscribers per MHz.

The criticism comes as Communications Minister D Raja is considering a policy on 3G spectrum and finalising the release of more spectrum to the industry.

RCom said according to published figures, margins in the telecom industry had increased from 19 per cent in 2005 to 38 per cent in 2006, which was in line with the world average.

The GSM operators, through the Cellular Operators' Association of India, have said calculating spectrum utilisation on MHz use is wrong.

"A network is built on busy traffic at the central business district. Obviously, the spectrum I need in Gurgaon might be less than in Connaught Place, but the network has to be built on my requirement for Connaught Place. On that criterion, we have global standards," said COAI Secretary General TV Ramachandran.

Ramachandran added that China had two pan-China operators while India has six to eight operators, many of whom operate only in certain areas, so the comparison was not valid.