The Hindu Business Line : TRAI proposes hybrid model for allocating 3G spectrum

The Telecom Regulatory Authority of India (TRAI) has decided to adopt a hybrid pricing model for allocating spectrum for third generation (3G) services, which means that operators will be first put through a pre-qualification round, after which an auction would be carried out for qualified companies.

This model has been used in countries such as Italy, France and Hong Kong.

The telecom regulator is also likely to rule out the use of 1900 Mhz for 3G services on the grounds that issues of interference with 2.1GHz band have not been addressed satisfactorily.

The detailed recommendations are expected to be announced on Wednesday.

The TRAI has already written to the Department of Telecom (DoT) to conduct tests in an environment where both the frequency bands are used simultaneously.

"We are not convinced that a dual band policy will work. So, we have asked the DoT to enable tests and trials to know for sure whether it causes interference," said a TRAI source.

The move will be a setback for CDMA operators, who have been demanding 1900 Mhz band for 3G services.

On the other hand, cellular operators using GSM technology will be happy with the decision, as they have been pushing for 2.1Ghz band to be reserved for 3G services.

The TRAI held two meetings today to arrive at a consensus before it announces the recommendations on Wednesday.

The issues related to spectrum pricing and method of allocation had split the telecom operators in the middle, with GSM operators seeking low entry fees and the Tatas pushing for an entry fee of Rs 1,500 crore.

TRAI sources said that the spectrum available was not enough to accommodate all the operators and, therefore, a selection process may have to be carried out to determine the operators who would be eligible to offer 3G services.

Analysts, however, said that auctioning the spectrum could lead to operators bidding high amounts to acquire a licence, which in turn would make the service very expensive for consumers.

Those supporting the auction route have said that services under 3G would be a premium offering that will not appeal to the masses.