The Economic Times
11 Apr 2009, 0140 hrs IST

CHENNAI/KOLKATA: The communications ministry has decided against granting fresh telecom licences against 343 pending applications, as it looks to prevent unhealthy competition in an already crowded market.

“We have received 343 applications after September 25, 2007, and the government does not intend to grant further licences in the foreseeable future, as there are enough players in the market to ensure competition,” the department of telecom (DoT) said in an internal note dated March 25. DoT has given licences to every company that had applied before September 25, 2007.

DoT’s move will also impact three operators — Tata Teleservices, Sistema-Shyam and Swan Telecom — that have applied for dual-technology licences under which telcos can offer services based on both GSM and CDMA platforms. DoT has sought the Telecom Commission’s (TC) nod to include dual-technology licences of these companies in some circles, along with the other pending applications. The commission is the apex decision-making body of the communications ministry.

Tata Teleservices, which currently offers services using the CDMA platform, has also been awarded GSM radio waves in most areas of the country. However, in three circles — Assam, North East and J&K — the company had applied late for GSM spectrum, DoT said. According the DoT note, the Tatas had applied for GSM licences in Assam in March 2008, and for North East and J&K in December 2008.

Similarly, while Sistema-Shyam has already been awarded CDMA air waves across the country, DoT wants to put its application for a pan-India GSM licence on hold. This is because the company had applied for a GSM licence and spectrum only in March 2008, the note added. Another company that is likely to be impacted is Swan Telecom. Swan has already been issued GSM licences and spectrum in 13 circles and DoT has placed its request for CDMA spectrum on hold.

DoT’s decision to not process these 343 applications also implies that several companies, such as AT&T, Ispat, Moser Baer, DLF and Tulip, which applied for licences between September 26, 2007, and October 1, 2007, will not get second-generation (2G) telecom licences from the government. Some 46 companies had applied for 2G telecom licences, of which 24 applied between September 25, 2007, and October 1, 2007. The government has not accepted any fresh applications for telecom licences after October 1, 2007.

Telecommunications minister A Raja had initially announced that DoT would accept applications for telecom licences until October 1 2007, and this resulted in about 46 companies applying before this date. However, Mr Raja subsequently advanced the deadline to September 25, 2007, which resulted in a few select Indian companies, including Swan, Datacom, Unitech, Loop and STel, getting telecom licences.