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March 27, 2001
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Money > Business Headlines > Report March 27, 2001 |
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New spectrum allocations likely to cause huge losses to basic playersBS ICE Bureau The spectrum allocation by the government on Saturday has put the existing basic operators in discomfort. The policy guidelines while bringing the existing player under the new procedure for allocating spectrum has restricted it to 2.5 MHz when most of the 6 players have been given 5 MHz or more as per the previous licence agreement. An industry spokesperson said that the spectrum allocation procedure announced on Saturday is detrimental to the 6 basic operators who have planned their networks on the basis that they have been allocated 5 MHz spectrum upfront. Now that the policy is restricted the spectrum allocated to 2.5 MHz most of the 6 operators who have utilised about 3 to 4 MHz will have to forfeit the unutilised frequency to the government. The spokesperson said that this would entail huge losses for the basic operators in terms of reworking their network plans, in terms of cost as they would have to bring in more base stations to compensate for the reduction in the spectrum allocated. Industry sources said that the coming weeks would open a Pandora's box of litigations being filed against the government not only by the existing operators but also by new operators who will not be able to make it into the first come first serve section. Sources said that while spectrum will be allocated within 6 months time any operators who wants to enter the basic operations after that will not get spectrum. The policy announced on Saturday stipulates that any spectrum allocated and not effectively used shall stand withdrawn after the expiry of one year. It adds that in case existing licensees have been allocated more spectrum than as indicated it has to be ensured that effective steps are taken for utilisation of spectrum of upto 2.5 MHz. Another issue that is being asked by the cellular operators this time is the way the policy guidelines were issued out on Saturday.
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