Decks were cleared on Wednesday for launching 3G mobile and broadband services in the country, with the government allocating air waves to private operators after making certain amends to the licence terms.
The operators are authorised to use the spectrum for a period of 20 years from 1st September, according to the amended licence conditions that allows companies to offer 3G services till the validity of the spectrum even if their telecom licences expire prior to that.
The government has imposed a roll-out obligation, under which the service providers would have to cover at least 90 percent of the service areas in the metros within the next five years.
Bharti Airtel, Vodafone, RCom, Tatas, Idea Cellular, Aircel and S Tel were the operators who had bagged 3G spectrum in the auction in May that fetched the government over Rs 51,000 crore apart from about Rs 16,000 crore from the two telecom PSUs -- BSNL and MTNL.
BSNL and MTNL were awarded spectrum more than a year ago in view of their obligation to procure equipments through cumbersome process of inviting tenders.
BSNL offers services throughout the country, except Delhi and Mumbai where MTNL is the operator.
The operators have been awarded 5 Mhz of spectrum in each circle they won in the auction.
In the two metros of Delhi and Mumbai, three operators -- Bharti Airtel, Vodafone and Reliance Communication had emerged the winners while no operator could bag pan-India spectrum in the auction that was conducted between 9th April and 18th May this year.
The government had auctioned three 3G slots throughout the nation, while four slots were offered in five circles.
3G allows high-speed mobile broadband access enabling users to download full length movies, make video calls and watch live television programmes.
According to the amendment, if the operators fail to achieve the roll-out obligations, they would be given extension for one more year after paying 2.5 percent of the spectrum acquisition charge per quarter.
Also, in case of two companies merging, only one slot of spectrum can be retained, according to the amended rules.
The operators will have to pay the upward revised spectrum usage charges ranging between 3-8 percent depending upon the quantum of spectrum held by them.
Telcos welcome spectrum allocation
Telecom operators cheered the government's move to allocate 3G spectrum, which will allow them to offer high-speed data services to subscribers, and said that they were set to roll out the next generation of mobile telephony across the country.
The government on Wednesday amended licences authorising telecom operators to use allocated 3G air waves for commercial use.
The private operators -- Bharti Airtel, Vodafone, RCom, Tatas, Idea Cellular, Aircel and S Tel have been awarded 5 Mhz of spectrum in each circle they won in the auction.
Welcoming the move, Reliance Communications CEO (Wireless Business) Syed Safawi said, "By releasing the 3G spectrum as promised, the Government has paved the way for the next revolution in mobile telecommunications."
Echoing similar views, Vodafone Essar Director (Strategy) Samaresh Parida said, "We are pleased to receive the spectrum today. Our implementation is on schedule and we will launch our 3G services in a few months."
"As announced earlier, we have already placed orders for 3G network equipment. We will now closely work with our partners NTT DOCOMO to put our network and content in place," a TTSL spokesperson said.
Another telecom operator Aircel confirmed the allotment of 3G air waves, but declined to comment on the details of service roll-out.
Telecom operators are betting big on roll-out of 3G services, which will provide subscribers access to high speed download of videos, music and other content.
This is expected to further drive competition in the cellular telephony market, which is adding 15-16 million subscribers a month.
According to TRAI, the total mobile subscriber base stood at 635.51 million for month ended June 2010.
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