GSM operators face hurdles in spectrum allocation

Trai has suggested raising the subscriber base criteria for fresh allocation by five times. Telecom Engineering Centre (TEC) has suggested that the threshold be stiffened by 800 %. For example, in Delhi an operator can accommodate 6 lakhs subscribers with the initial 4.4 MHz of spectrum. But to be eligible for 6.2 MHz spectrum, the operator must have 19 lakhs subscribers and to get 8 MHz spectrum, the subscriber base has to be at least 34 lakhs. Similarly for Mumbai, to get 6.2 MHz spectrum the subscriber base has to be at least 23 lakhs and for 8 MHz and 10 MHz spectrum it has to be at least 41 lakhs and 58 lakhs respectively. In Kolkata, to get 6.2 MHz spectrum an operator must have subscriber base of at least 20 lakhs. Likewise to get 8 and 10 MHz spectrum the subscriber base should be at least 36 lakhs and 50 lakhs respectively. The hardest hit are Bharti Airtel, Vodafone, Idea and Spice. The new norms are expected to create havoc with valuations of this multi-billion dollar firms. Trai had already tightened subscriber thresholds two to four times and COAI challenged this in TDSAT. The entry fee of Rs.1651.57 crores fixed for UAS license with 6.2 MHz spectrum is set to be at least Rs. 5000 to Rs. 7000 crores.