Tata Tele surrenders excess spectrum: What it means for other CDMA players

New Delhi: Tata Teleservices has become the first telecom service provider to surrender some spectrum in order to avoid paying one-time charges for holding spectrum beyond 2.5 mhz.

This decision not only sets the tone for other telcos to look for similar measures to register protest at the dreaded one-time charge, but it could also help CDMA players like Sistema to now get contiguous spectrum in some circles where the airwaves were earlier not available.

So Tata Tele will surrender spectrum beyond 2.5 megahertz in all circles barring Delhi and Mumbai. But it will retain 3.75 MHz of spectrum in Delhi and Mumbai for which it will pay a one-time fee to the government.

Tata Tele will surrender spectrum beyond 2.5 megahertz in all circles barring Delhi and Mumbai. But it will retain 3.75 MHz of spectrum in Delhi and Mumbai for which it will pay a one-time fee to the government. AFP[/caption]

A Tata Teleservices spokesperson did not return calls, neither did she send any statement on the matter. But agencies quoted a company statement saying "Tata Teleservices, under protest and without prejudice, has intimated its decision to the department of telecommunications to surrender spectrum in the CDMA 800 MHz (band) beyond 2.5 MHz in all circles except Mumbai and Delhi."

More from Business

"In these two metros, the company will retain one additional carrier (1.25 MHz) beyond 2.5 MHz for the balance period of licences," it added.

The government had imposed a one-time spectrum fee on telecom companies holding airwaves above 2.5 MHz in the 800 MHz band used by CDMA operators from January 1 this year. As per the order, the charges will be levied on additional spectrum for the rest of the licence period and operators not willing to pay these charges will be allowed to surrender their spectrum held above 2.5 Mhz.

Tata also said in that statement "The company stands committed to ensuring that this will not adversely affect network or service quality and is looking to deploy additional capex to offset the reduced spectrum availability."

The company also sought and obtained stays against the DoT demand for one-time spectrum charges above 2.5 MHz in the 800 MHz band in Kolkata and Mumbai high courts, it added.

It remains to be seen whether Sistema, the most aggressive CDMA player in India now, takes this opportunity to buy more spectrum.