The government today allotted start-up GSM spectrum to new telecom players, including Datacom and Unitech, in four circles of Mumbai, Maharashtra, Punjab and Uttar Pradesh (East). Tata Teleservices, which has got GSM licence under dual technology policy, has also been allotted spectrum in the lucrative Mumbai circle while it is yet to get the radio frequency in other three circles. With this, new players can now roll out services in 10 circles as the government has already released spectrum in six circles of Tamil Nadu, Andhra Pradesh, Kerala, Karnataka, Orissa and Madhya Pradesh. In Punjab, only three players have been accommodated as only 15 MHz spectrum was available. HFCL, a CDMA player, has got GSM spectrum in Punjab under the dual technology policy.
The Study of India’s Universal Service Instruments by LIRNEasia researchers Payal Malik & Harsha De Silva, critiqued the Indian government’s policy that made only fixed line operators eligible for USO funds: As of today, the government is giving USO fund support to only the fixed line operators offering services in the rural areas. The over defining terms in the law is a bad idea in a rapidly evolving technology environment, though this correction has been suggested it is quite possible that the previous auctions have left huge amounts of rents that have been appropriated by the incumbent. In an industry that manifests the potential for rapid technological change and innovation, such as telecom, an economic analysis of a problem should not focus too narrowly or exclusively on the best use of society’s resources from the standpoint of today’s technology and resource availability i.e. static economic efficiency but should be viewed from a dynamic perspective.