In a letter to Prime Minister Manmohan Singh, countering some of Tata's claims with regard to the allocation norm of spectrum, COAI, the operators apex body, has said, "We believe that... lenient approach towards CDMA operators not only gives them the carte blanche to use their spectrum inefficiently by setting up far fewer cellsites as compared to the GSM operators, but also gives them a tremendous cost and competitive advantage over GSM.
The association contended that "CDMA spectrum has a spectral characteristic factor of 5:1 vis-à-vis GSM spectrum, the order has maintained a lenient ratio of 2:1 between GSM and CDMA spectrum."
COAI also alleged that the CDMA operators were being favoured under the allotment criteria through a very lenient subscriber linkage.
The letter also takes potshots at some of the statements of a CDMA operator, which appeared in media (Ratan Tata) with regard to the allocation procedure.
"It is irrelevant for the CDMA operator concerned to ask for a national spectrum policy after speaking to all stakeholders. We already have a well-defined, spectrum policy - National Frequency Allocation Plan - that is fully in line with the latest technological developments and the radio regulations laid down by the ITU.
"We also are disturbed to note that the media report carries several incorrect statements and misrepresentations, which appear to be aimed at creating a controversy and disrupting the spectrum allotment process that has just been opened up.
"If such vested interests are allowed to succeed, it could have a serious adverse impact on our future growth", COAI's letter said. There is also an allegation that the DoT order does not appear to be part of a publicly defined policy.
In this regard, it is not required to stipulate how any particular frequency spot is actually allotted to a wireless operator, which is the function of the WPC. This allegation by the CDMA operator reflects the incorrect understanding of the role of policy in spectrum allotment.
The CDMA operator also questions the subscriber link approach that has been adopted by the government, thus again reflecting a lack of understanding of ground realities and the legacy of this approach. Subscriber-linked approach was adopted by the government after extensive consultations with the industry.
Any approach which holds the spectrum in reserve for an operator based on years of operation, as is being suggested by the CDMA operator would be discriminatory, against public interest and in complete contravention of the fundamental principle of spectrum management.
There is also an allegation that the government order curbs the introduction of new technologies and protects users of old technologies. Both the policy and licenses are technology neutral, it said.
The suggestion that a price tag of Rs 1500 crore (Rs 15 billion) be attached to allotment of all India spectrum demonstrates the flawed approach of the CDMA operator.
"It is most ill-advised of the CDMA operator to suggest that the government should discard a successful formula of revenue share and revert back to a formula that brought this entire industry to the brink of bankruptcy in 1998," the letter added.
Furthermore, in the context of India already offering the globally lowest mobile tariffs, it would indeed be naive and simplistic to assume that a high license fee for spectrum would not lead to an all round increase in tariffs, it said.
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