DoT, until recently, was in favour of the entry of international players into the 3G space. However, in an ironic twist of events, a note was recently sent by DoT, or a section of it, to the prime minister, making a case for allotting 3G spectrum to existing players only.

DoT's note contradicts the statements of Communications and IT Minister A. Raja, who said that the entry of international and new players would not only boost competition, but would also help obtain better prices for scarce spectrum as their entry would be through the open auction route.

TRAI, meanwhile, is completely opposed to the entry of foreign players. According to the regulator, this will disturb the competition and level playing field in the industry. Besides, TRAI has raised the point whether 5 MHz of spectrum would be sufficient for launching 3G operations from scratch. The regulator also feels that getting new players to bid at the auction would make their entry more expensive, which would result in higher 3G tariffs. In its recommendations, TRAI had stressed that the existing domestic operators should be allowed to offer 3G services first.

For nearly a month, DoT and TRAI have been at loggerheads over the issue. While TRAI maintained that including foreign players would not only complicate the process but also delay 3G rollout, DoT resented TRAI meddling in policy issues.

Meanwhile, DoT is taking steps to avoid further controversy. It recently mooted a proposal that will allow all 342 companies that had applied for unified access service licences between September 25, 2007 and October 1, 2007 to participate in the 3G spectrum bidding process. According to industry watchers, the move is smart as it will allow foreign and new domestic companies to bid for 3G spectrum, while the existing applicants would have no reason to contest the applications of the new players on the grounds that the latter have not applied for any licence.