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3G In India: Spectrum Allocated To Telecom Operators, License Fee Increased

3G spectrum was allocated to telecom operators by India’s Department of Telecommunications (DoT) today, Business Standard reports quoting unnamed DoT sources. The allocation appears to have been done according to plan, and Dow Jones Newswires reports that Tata Teleservices as has confirmed receiving the spectrum in nine circles. Allocations of spectrum were due today, following the end of the 3G auction on May 19th, wherein three slots of spectrum per circle were allocated across 7 telecom operators. DoT modified the terms for the Universal Access Service License (UASL) and Cellular Mobile Telephony Service (CMTS) license today to allow these telecom operators to use 3G spectrum for 20 years from 1st September 2010 onwards, or until the end of the term of their existing license, whichever is earlier.

Of the telecom operators, Aircel, Bharti Airtel and Reliance Communications won spectrum in 13 circles,  Idea Cellular in eleven, Tata Teleservices and Vodafone in nine, and S Tel in three circles.

License Fee

Following the amendment to licensing agreements for these telecom operators today, the DoT also amended license fee being charged. Contrary to what is being reported in some publications, this is not unexpected. These spectrum charges had been indicated in the initial Notice Inviting Applications (for 3G auction):

Roll out obligations

– Metro Circles: 90% of metro service area will need to be covered within five years of the effective date
– Category A, B C service area: 50% of district headquarters (DHQ) will be covered by 3G spectrum, of which at least 15% should be rural Short distance charging (SDC) areas within 5 years. Rural SDC areas are such that 50% of their population lives in rural areas. The operator shall be permitted to cover any other town in the district in lieu of the DHQ. The choice of expansion and towns beyond 50% shall lie with the operator.

In case the telecom operator does not meet the rollout obligations in 5 years they can get a one year extension by paying an additional 2.5% of the successful bid amount. Beyond that, if rollout obligations are not met, the spectrum will be withdrawn.

Other important conditions

– No Merger of Spectrum In Case of M&A: If two or more licensees holding 3G spectrum merge they’ll be allowed to retain only one 3G spectrum block i that area and surrender the remaining 3G spectrum blocks
– Return of Spectrum: licensee may surrender 3G spectrum by giving a 60 calendar day notice and 30 day notice to each customer. All fees payable until date of surrender of 3G spectrum need to be paid.

Download a printable version of the chart below (pdf)

India’s 3G Auction Ends; Operator And Circle-Wise Results

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