TRAI – DoT Battle Over 3G Foreign Entrants; Sarin Comments On Spectrum Allocation

This is beginning to look like a family drama. TRAI and DoT are not seeing eye-to-eye again, this time over entry of foreign players in the 3G segment. Like all family rivalries, this one will be referred to the elders, namely the eGoM (empowered Group of Ministers). The eGOM is a group of ministers, established in September 2005 under external affairs minister Pranab Mukherjee, to look into the issue of frequency allocation for defence services. Thus far, they have only met once. The DoT is also sour about TRAI meddling in policy issues stating TRAI’s powers are only limited to giving recommendations while final policy decisions have to be made by the DoT. TRAI on the other hand believes that entry of foreign players will harm competition. What is the meaning of ‘foreign’, with the exception of Reliance (might not be if the MTN stock-cash deal goes through), Airtel and Vodafone (NYSE: VOD) both have a history of overseas funding and acquisition besides having disproportionately large market shares. On the issue of spectrum allocation, Communications and IT Minister A Raja is quoted by ET stating “Whether there is common auction or open auction there is be no bar on foreign players.” Former Vodafone CEO Arun Sarin in an interview with NDTV Profit yesterday remarked that Indian standards of spectrum allocation were unusual by world standards. The government is expected to rollout 3G services by January next year and apparently the major spoke in the wheel causing the policy guideline delay has been the issue of foreign players.