Telecos will have to wait till Dec for spectrum: Raja

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Telecos will have to wait till Dec for spectrum: Raja

The spectrum starved telecom industry will need to wait till almost the year-end for more. This, after the Defence missed the last three deadlines for vacating spectrum. Could this derail growth? CNBC-TV18 finds out.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show » RELATED NEWS BSNL to float GSM tender for 50 m lines: Tele Min ALSO READ See latest News about Bharti Airtel See previous management interviews See what other Experts & Brokerages are saying about Bharti Airtel Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Reliance Communications | Spice Communications |

The spectrum starved telecom industry will need to wait till almost the year-end for more. This, after the Defence missed the last three deadlines for vacating spectrum. Could this derail growth? CNBC-TV18 finds out.

It was about a year ago when former Telecom Minister Dayanidhi Maran gave an assurance that Defence would vacate 45 MHz spectrum by December last year. Maran probably got the month right but the year wrong! The December 2006 deadline was pushed to March, which then got pushed to July. The new Telecom Minister Andimuthu Raja now says that Defence could take till almost the year-end to free up spectrum for commercial use. That has prompted the Department of Telecom to look at other options as well.

A Raja, Minister, IT & Communications, says, "I have requested the Defence Minister to have a GoM by August 15. We are having an internal assessment to see where all spectrum is being used by other agencies and whether there is any spectrum with other agencies, which is not being used at all..."

The delay in allotment will come as a huge blow for an industry that is already spectrum starved. Analysts are now concerned about the impact of the spectrum crunch on subscriber additions. But Sunil Mittal , CMD, Bharti Airtel , says its quality not growth that will be hit.

" In metros, the quality of service is already getting affected because of a lack of spectrum, which is why we are anxious....," says Mittal.

While additional spectrum is crucial for the growth plans of big boys like Bharti and Reliance Communications it is critical for smaller operators like Aircel and Spice . Aircel, for instance, currently operates in nine circles and has gotten a license for a pan-India rollout but the Chennai-based operator can't expand till it gets more spectrum.