RCom gets GSM spectrum for 14 circles

NEW DELHI: In a major boost to Anil Ambani-owned Reliance Communications (RCom), the government on Friday cleared the allocation of GSM spectrum to the company in 14 circles.

Sources told ET that RCOM has been allotted 4.4 MHz of start-up spectrum in these 14 circles. Reliance, through its wholly-owned subsidiary, Reliance Telecom, already offers GSM services in the remaining eight circles. This implies that RCom’s plans of offering both GSM and CDMA services on a pan-India basis has finally be translated into a reality.

Simultaneously, existing GSM operators, Idea Cellular and Vodafone Essar, have also been allotted start-up spectrum of 4.4 Mhz in the circles where they already hold licences. Idea holds licences in two circles, Vodafone in 7 and Aircel in 13.

This implies that Idea, which already has operations in 11 telecom circles in the country, can immediately expand its footprint to 13 circles while Vodafone Essar, which has operations in 16 circles and Aircel, which currently offers services in 9 circles, will now be able to expand their footprint on a pan-India basis.

Existing GSM operators such as Bharti and Vodafone have found some relief as their demands for additional spectrum, which has been held up for close to two years, have also been cleared. This implies that several GSM players will immediately be allotted additional spectrum in places where they already operate.

Sources said that Bharti and Vodfone had already been allotted additional spectrum in two circles each. Existing GSM players are being allotted additional spectrum as per the new criteria recommended by Trai. The regulator had recommended that the subscriber-linked spectrum allocation criteria be enhanced by two to six times before existing operators are granted additional spectrum.

ET has also learnt that RCom will roll-out GSM services in these 14 circles within the next couple of months and will offer tariffs that are up to 30% lower than the prevailing GSM call rates. RCom which offers CDMA services across the country plans to have a similar GSM network in place by the year-end.

The move is set to trigger a series of price wars that will benefit consumers. Besides, increased competition will also ensure better quality of services and a wider rage of value added services as telcos go all-out to retain their subscribers.

When contacted on the issue of being granted GSM spectrum, RCom, in a statement said, “The launch of nation-wide GSM services would enable Reliance Communications to effectively target the fast-growing subscriber additions of 6 million GSM subscribers every month. The company would also address the telecommunication requirements of the existing 172 million GSM customers with the launch of nation-wide GSM network in addition to its CDMA network.”

RCOM won its first victory earlier in the day, when the Delhi High Court, hearing a petition filed by leading GSM players, refused to stay the process of spectrum allotment to Anil Ambani-owned company and other aspirants who hold the dual technology license. (Under the dual technology licence, a service provider can offer both GSM and CDMA services across the country.)

During the proceeding senior advocate Fali Nariman, appearing for GSM lobby group, Cellular Operators Association of India (COAI), requested before the single-member bench to stop the allocation of spectrum to RCom.

However, Justice Gita Mittal refused to grant a stay and directed that the matter be adjourned till January 14. Mr Nariman also mentioned an application filed by the COAI before the court to stay the whole process, but GSM players received a major setback as the they failed to find relief from the Delhi High Court.