In yet another blow to the existing GSM operators, the Communication Ministry has decided to auction spectrum for third generation (3G) mobile services and wireless broadband services through technologies such as Wi-Max.
The auction will be open to new companies wanting to foray into the telecom sector as well as established foreign telecom players. The existing operators had wanted the auction for 3G services to be limited to the licence holders.
The Ministry’s decision to open up the bidding to all players is also a move away from the telecom regulator’s recommendations that it be restricted to existing operators. The move gives a chance to the likes of Deutsche Telecom, AT&T and new Indian players such as Unitech and Hindujas, which may not get spectrum in the 2G band given the huge rush, to enter the high growth telecoms market. This means that existing GSM operators such as Bharti Airtel and Vodafone Essar, after being asked to rope in more subscribers for being eligible for more spectrum for 2G services, will now have to fight it out for a piece of 3G spectrum.