The proposal by India’s Telecommunication Commission (TC) to only allow three mobile providers to operate 3G services has caused uproar among the wider mobile operator community. As reported by the Times of India, the TC intends to auction three licences with an initial allocation of 10MHz spectrum as against the more typical 5MHz spectrum. The TC plans for one of the three successful bidders to be the state-owned BSNL/MTNL, which would be required to match the highest bid placed by private operators when the auction occurs.

This development would leave at least four of the existing six operators and nearly all of the new operators without 3G spectrum – a worrying consequence for companies whose valuation and growth is linked to the availability of spectrum in 2G and migration to 3G.

As the 3G proposals stand in their present form, this carries with it the potential of bringing together rivals such as Vodafone, Idea and Bharti, which could join hands with Reliance, Tatas and some of the new entrants to lobby for more slots of 5 MHz as against 10 MHz as is currently proposed.