India has decided to auction CDMA licences for 3G services, a change in policy that means Reliance Communications (RLCM.BO: Quote, Profile, Research, Stock Buzz) and Tata Teleservices will have to bid for spectrum they were previously guaranteed of getting.
No. 2 mobile operator Reliance Communications (RLCM.BO: Quote, Profile, Research, Stock Buzz) and sixth-ranked Tata Teleservices are the only operators with major CDMA operations in India, where the GSM platform dominates. At the start of August, the government announced plans for a global auction of 3G licences.
At the time only two CDMA licences were thought to be available, so the plan was that Reliance and Tata would pay a pro-rata price based on the outcome of the GSM auction, telecom minister Andimuthu Raja said on Thursday.
"Now one more operator has been permitted. So again we consulted the TRAI (Telecom Regulatory Authority of India) and took a decision that it can also be auctioned."
CDMA and GSM mobile services are provided on different bandwidths.
The government has said the global auction for GSM 3G spectrum would end by December. Current Indian telecoms operators and foreign firms with prior experience in 3G services are eligible to bid.
Reliance Communications has some GSM subscribers, and is expanding its network, but at present more than 80 percent of its customers are on the CDMA platform. Chairman Anil Ambani has said Reliance would consider providing 3G both on GSM and CDMA.
Tata Teleservices has acquired licences for second-generation GSM mobile, but is yet to start services. (Editing by John Mair)