DoT clears route for 5 new telecom operators

DoT has cleared the route for five new operators to enter the Indian telecom sector. DoT issued LOIs to new applicants including Unitech, Shipping Stop and Datacom for pan India operations, reports CNBC-TV18. However, Parsvnath, Indiabulls and Cheetah's applications have been rejected by DoT. Spice Tele has got an LOI for operations in four circles. Meanwhile, Bycell, Allianz Infra, HFCL failed to bag LOIs.

The LOIs will be converted to pan India licence on payment of Rs 1,650 crore. Priority in spectrum allotment will be determined by conversion of LOIs.

The Telecom Minister has signed an in-principle order for GDM spectrum allotment to Reliance Commmunication. CNBC-TV18’s Sandeep Gurumurthi said that this allotment is critical for RelComm as it can not go ahead an place orders for GSM spectrum equipment and put their backend in place.

By Sandeep Gurumurthy, CNBC-TV18

The Telecom Minister has signed an in-principle order for the start up GSM spectrum allotment to Reliance Communications and also for additional GSM spectrum allotment to Bharti Airtel and Vodafone. The in-principle order has not been issued yet and that’s because the secretary and the member - technology also needs to sign that file. But it’s now almost a done deal, just the matter of time or a couple of hours maybe, that’s what our sources tell us.

The allotment of start up spectrum for Reliance Communications is critical because now they can go ahead and place orders for GSM spectrum equipments and put their backend in place. So once defence vacates spectrum, they can roll out GSM services.

As far as Bharti Airtel  and Vodafone are concerned, again a long expected line. It’s only as per TRAI criteria and they will not get in all the circles. According to analysts, they could only get in about three or four circles at this point in time because they have reached their subscriber thresholds through additional spectrum allotment only in three or four circles. We understand that Delhi and Bihar could be two of those circles, but that’s not confirmed information.

As far as Idea Cellular is concerned, it also got a start up spectrum in two circles. We are told that it is also going get an Lol for a license in nine circles where it’s not operating right now. Idea currently operates only in 11 circles. So in Mumbai, it gets spectrum and in nine other circles. where it is not operating it will get an Lol. Idea will have to convert that Lol by paying an upfront fee. It’s about Rs 1,650 crore for a pan India license, but it will be lot lesser for idea as they need to pay only for nine circles.

The slew of companies that have applied for license likes of Parsvanth, Unitech, some of their fate is also going to be decided in few hours from now. We understand that from very reliable sources that four or five of the 19 that had applied before September 25 are going to be issued a pan India license, so quite a few rejections. I don’t want to stick my neck out and say who those rejections could be, we’ll have to wait for an hour or two, but what we do know is that Unitech is definitely one of those who have made it. It’s likely to get an Lol.

These LoI’s will need to be converted into a license only when one pays an upfront fee of Rs 1,650 crore. So this is big news both, on the LoI front and on the front of the spectrum allotment. The Secretary of Telecom will have to sign the file and only after that will these in-principle orders be issued. We expect that to be happening over the next couple of hours.