NEW DELHI (WiMAX Day). The Department of Telecom (DoT) in India yesterday revealed its plans for licensing WiMAX spectrum in India. The DoT has proposed that that it will auction licenses in the 2.5 GHz frequency band, and only three licenses will be made available. The proposal is now awaiting approval of the Indian telecoms minister.

According to a report in the Economic Times, the DoT also proposed that one of the three licenses should be reserved for the state-owned telecoms companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Limited ((MTNL). The two companies were formed in October, 2000, and provide a wide range of telecom services in India, including fixed-line, CDMA, GSM Mobile, Internet, Broadband, etc.

The announcement of the DoT came as a surprise to many as it is contrary to previous recommendations of the telecom regulator Trai. The frequency band of 3.4 ~ 3.6 GHz had been recommended previously, with allocation for up to 13 separate licenses.

Presently, the 3.4 ~ 3.6 GHz spectrum in India is occupied by satellite-services and broadcasters. While considerable testing has been made in this spectrum for WiMAX, no conclusion has yet been made by the DoT if WiMAX services can co-exist in this spectrum range with the existing services. A DoT spokesman said further compatibility testing is required.

A report drafted by a DoT committee stated that allocation of 2.5 GHz spectrum is in line with global recommendations for mobile WiMAX, and conforms to the WiMAX Forum frequency specifications.

The pricing for the 2.5 GHz spectrum was also discussed by the DoT committee, which made reference to the original Trai recommendations for pricing, according to The Hindu.

That report proposed that the base price for bidding on WiMAX spectrum should be at 25% of the proposed prices for 3G spectrum. Telecom regions in India are divided in 23 circles, which have categories a, b, and c. Thus for areas such as Delhi, which is in a category A metro circle, the base price would be Rs 40 crore (US$9.95 million). By comparison, base prices for 3G spectrum in the same area were proposed at Rs 150 crore, or roughly US$ 40 million.

The spectrum pricing drew the ire of operators planning to bid on 3G spectrum. Many noted that the 2.5 GHz frequency range should be available for 3G operators as well, and should not be priced differently. However the government has yet to approve the allocation of 3G spectrum licenses, and many presume the spectrum range for 3G will be at 1.9 Ghz.

Many potential bidders are concerned that if spectrum is first allocated for WiMAX it will dilute the value of 3G spectrum as many operators will lose any incentive for bidding on 3G. One report noted that if the 2.5 Ghz spectrum is soon allocated to WiMAX operators, then WiMAX will have a serious competitive advantage over 3G in India, and networks may very well roll-out eighteen months before 3G.