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To break the logjam over spectrum allocation and resolve other contentious issues such as access deficit charges (ADC) and interconnection, the government has decided to set up a joint working group (JWG) of GSM and CDMA operators. This decision was taken recently by the communications and IT minister, Dayanidhi Maran.

The JWG will comprise not just industry representatives from both GSM and CDMA segments but will also include senior government officials. The group is expected to give its inputs on all the issues by December.

Meanwhile, the Wireless Planning Coordination (WPC) wing of the Department of Telecommunications (DoT) has sought a freeze on any further spectrum allocation to mobile service providers till such time as a policy is in place. According to a senior DoT official, "It is recommended that no further spectrum is made available to telecom operators till the issue regarding criteria and spectrum efficiency of the two technologies is resolved." If this is implemented, it will adversely affect mobile service providers, as it will restrict them from rolling out services in new towns and cities.

In light of this, industry analysts point out that the minister has done well in asking rival telecom groups to sit together and sort out their differences, especially on the issue of fresh spectrum allocation. "Otherwise it would take a long time to break the stalemate," says a telecom analyst.

Indeed, the industry can illafford to go through various rounds of litigation to resolve such issues. The country's rapidly growing mobile sector is in urgent need of more spectrum in order to improve the quality of services. It also needs to cater to the 2.5 million subscribers being added every month, who need congestion-free services. Moreover, there is a move towards 3G services, which enable high speed data and video-based programmes on mobile phones.

A resolution will, no doubt, be difficult. GSM and CDMA-based operators have been at loggerheads over the spectrum issue for months; and the Telecom Regulatory Authority of India's (TRAI) recommendations early this year added to the differences.

The two sides have been battling over the allocation of 3G spectrum and the quantum of radio frequency to be available to them. While the CDMA operators, including Reliance Infocomm and Tata Teleservices, have been demanding the same quantum of spectrum as the GSM operators, the latter contend that such a move would disrupt the level playing field.

CDMA operators use 800 MHz, while GSM operators use 900/1800 MHz. CDMA operators would like 1900 MHz (currently occupied by the defence forces) for their services but the GSM group is opposed to it because it may cause interference with their services.

Also, TRAI had suggested that additional spectrum be given to CDMA operators in the 800 MHz band in which they currently operate to allow them to enhance their services. But GSM operators claim this would skew the level playing field as it would enable CDMA operators to offer 3G services ahead of them. This is mainly because they would have to wait till the 2 GHz spectrum is freed up by the defence forces.

In fact, GSM operators led by Bharti and Hutchison have drawn the attention of the communications ministry to the fact that they would have to bear an additional investment burden of Rs 30 billion if the government decided to allocate additional spectrum to CDMA operators.

With neither side willing to back off, the JWG clearly has its task cut out. Whatever resolution is finally worked out on contentious issues such as spectrum allocation, ADC and interconnection, industry analysts caution it must not be at an increased cost to consumers, as it will not help to achieve the necessary teledensity. Nor should the issues be settled by compromising the choice of technology. Any decision on spectrum must also weigh the short-term costs of following global practice in allocating more spectrum for 3G to CDMA operators.

Meanwhile, the communications and defence ministries have got together and are setting up a group of senior officials, reportedly comprising officials from the three armed forces and the WPC, to look at ways to release more spectrum for mobile use. Since much of the spectrum is occupied by the defence forces, in various frequency bands, the constitution of such a group was deemed necessary.

Clearly, there is a need for a combined effort to iron out the differences and find a solution that is remunerative for the defence forces, which will have to vacate some frequency bands for relocation to mobile telephony. Especially the 2 GHz band, which TRAI has recommended for 3G services for both CDMA and GSM operators. As Sunil Bharti Mittal, CMD of the Bharti Group, sagaciously put it, "The industry is mature enough to sit and discuss and find a solution to all the problems."