New telcos are still kept in dark about the weather DoT, Department of Telecommunication is considering refund of the 2G spectrum money to new telecom operators who have not been able to commence their service.

It has been reported that option of exit is being discussed and debated by the Telecom commission, especially for the telecom operators who have not yet been able to roll out their services full fledged after being allotted the 2G spectrum.  The Telecom commission which is part of the Ministry of Telecommunication is the decision making authority in this issue. The government might likely to offer a refund for the money that these telecom operates paid for acquisition of the 2G spectrums in January 2008 once they surrendered the 2G spectrums back to the government. This was confirmed by a senior official in the Ministry who preferred to remain un named.

Swan Telecom is one of the new telecom operators in this growing sector who has approached DoT, Department of

Telecommunications with a request to surrender their spectrum and license and receive a refund of the entry fee that they had paid in 2008 for operations across the country.

The 2G spectrum was offered to several budding telecom companies in 2008 by the Indian Government. However given the current market dynamics and it has been noted that India has a higher number of telecom operators when compared to other countries and this has lead to intense competitions between these companies in terms of the lowest tariffs. The falling ARPUs are also a growing concern. All these issues have made it for new entrants to enter the already cluttered market and make a mark for themselves and hence they have stalled their roll out plans indefinitely.

Once all the feasible options are considered, the Telecom commission would take a decision on this burning issue at hand.

Department of telecom today allocated the 3G spectrum to the Indian telecom players. Tata Teleservices has confirmed receiving spectrums in all its nine circles and the allocation was done as per earlier plans. The 3G suction that ended on 19th May finally saw a closer today with the allocation of three slots of spectrum per circle to seven operators.

The Cellular Mobile Telephony Service (CMTS) and the Universal access Service License (UASL) were modified by the DoT and thus allowing the operators to use the spectrum for the next twenty years starting 1st September 2010 onwards or till the end of their existing license whichever is earlier.

Bharti Airtel, Aircel and Reliance Communications have won spectrums in 13 circles, Idea Cellular, Tata Teleservices, Vodafone Essar and S Tel in 11, 9 and 3 circles respectively.

The license fee has also been increased following amendments to the license agreements today. These spectrum charges were indicated in the initial invitations to the 3G auctions.

There are several roll out obligations that telecom operators will have to abide by. For Metro circlers within 5 years, close to 90 percent of the area would have to be covered. For Category A,B and C service areas, 15 per cent of the area to be covers should be Rural SDC, which are area that has close to 505 of rural population and 50 percent of the district headquarter areas should be covered. Expansion beyond 50 per cent is a choice that the operators can take.

A one year extension can be sought by the operators in case they are not able to meet their target of five years for the roll out plan. However they would have to pay an additional 2.5 percent of the successful bid amount and if beyond this, the operator does not meet their obligation, the spectrum would be withdrawn.

Other conditions that the operators have to abide by are that there would not be a possibility of merger of spectrum in case of a merger and acquisition of two or more licensees holding the 3G spectrum. The license holder has an option of surrendering the spectrum only after providing 30 days notice to each customer and 60 calendar day notice.

After an unofficial ban on Chinese telecom equipment vendors by Department of Telecommunications (DoT) and imposition of stringent norms on imported equipments on security issues, the Chinese vendors have started receiving orders from Indian telecom service providers to get ready for the rollout of 3G services. The two Chinese vendors who received clearances are Huawei and ZTE.

The revised norms for imported telecom equipments were announced by DoT in July, which drew large-scale protests from vendors worldwide. The new rules required equipment suppliers to provide government access to the equipment’s source code and design. Also, the suppliers will be held responsible for any security breach and hefty fine levied.

As the relationship between DoT and vendors were straining with the deadline for 3G rollout looming large, the Prime Minister’s Office is believed to have intervened, leading to rollback to earlier less stringent rules. Nokia Siemens was the first beneficiary under this last month. However, it was unclear whether this was a one-off case and will extend to other vendors, especially Chinese ones.

In the 3G auction held earlier this year, Tata Teleservices Ltd (TTSL) had won in nine circles. Both Nokia Siemens and Huawei were selected by TTSL as suppliers for its 3G rollout. While Nokia will rollout 3G network in four circles, Huawei will do so in five. The clearance from DoT based on liberal norms has enabled the Chinese vendor to land the second order in the country for 3G gear. Huawei’s first deal was signed with Reliance Communications.

Confirming the news TTSL Chief Technology Officer and President (Enterprise Business) A G Rao said, “The company will provide superior 3G technology and services to all our esteemed consumers, and to this end, we are getting the latest LTE-ready technology from our technology partner, Huawei.”

The Department of Telecom, DoT has finally abided by their promise to the 3G auction winners, of allocating the 3G spectrum by 1st September 2010 to the winners. Sources in the Department of Telecom have revealed this information.

The UASL, Unified Access Service License agreements have been amended by the Department of Telecommunication to include 3G services too. Sources also said that this amendment I would be the foundation the winners to go ahead with their roll out plans.

The Secretary General of AUSPI Mr. S C Khanna, has said, “Service providers have got the spectrum and they are happy about the timely delivery of spectrum to them.”

Telecom giants Reliance communications (RCOM) and Bharti Airtel have won majority of the 3G airwaves, 13 each in the 22 telecom zones on offer. Aircel, Idea Cellular, Vodafone Essar and Tata Teleservices are the other major telecom operators who had participated in the auction and had each won 13, 11, 9 and 9 circles respectively.

More or less prepared with their roll out plans, this announcement was made by all the winners and some of the telecom operators like Tata Teleservices even went one step ahead and have already identified and finalized their vendors for the 3G equipments. Tata Teleservices has selected Nokia Siemens Network as their vendor. Other winners are still in the process for finalizing their vendors and all have confirmed that this process is in its final stages.

India’s largest telecom service provider, Bharti Airtel has confirmed that they are ready with their final plans and would immediately commence roll out as soon as they are allocated the spectrum.

Talks of infrastructure sharing have been increasingly doing the rounds, in an attempt to curb the costs. It will become easier for the service providers to achieve their goals, especially with the specialized tower companies already established and ready to offer services.

Agreements for roaming are also in the process of being finalized as no telecom service provider has won a pan India spectrum thus placing paramount important on the roaming agreements being in place as it is very important to provide coverage across India.