GSM operators seek monopoly in 4G space: Ambani brothers

The shadow warfare between the Ambani brothers and the Big 3 of GSM - Bharti Airtel, Vodafone India and Idea Cellular - for grabbing higher revenue-generating data customers is getting uglier by the day. The subject: holding limits and pricing of precious 800 MHz or 'CDMA' spectrum that can be used for 4G services.

In similarly-themed second set of letters to telecom secretary Rakesh Garg, dated September 30, Mukesh Ambani-owned Reliance Jio Infocomm and brother Anil's Reliance Communications have accused India's top three GSM carriers of using Cellular Operators Association of India (COAI) as a platform to "skew market competition and continue the monopoly of a select few members in the 4G space".

ET has seen these letters, as well as a similar one by pure-play CDMA operator Sistema Shyam, which backs RCom and Jio.

Jio and RCom said COAI was trying to stonewall operators' efforts to "liberalise their existing 800 MHz holdings" by citing "ridiculous issues" to drive up the cost of such spectrum liberalisation and "make it financially unviable for the operators". An operator needs to pay a market-linked price, or winning price at the latest auction, to liberalise and use airwaves acquired without auctions to offer 4G services.

They were countering COAI's previous two letters to the government, dated September 16 and 28, which underlined the GSM body's demand for, in effect, raising the cost of liberalising CDMA airwaves and reducing the permissible 10 MHz cap of such spectrum.

Launching a no-holds-barred attack on the GSM biggies, RCom charged the COAI with "continuing a mala fide campaign to prevent fair competition" and trying to "delay and disrupt" liberalisation of CDMA airwaves to "protect the position of just three members", in a veiled dig at Airtel, Vodafone and Idea, India's top three carriers.

The letters were shot off to the government barely hours after RCom's AGM on Wednesday, where chairman Anil Ambani had noted his company's consolidation moves with Jio through advanced talks to share and trade 800 MHz spectrum, which will allow both to offer 4G services across large parts of India.

The current war to attract data subscribers is being fought on 3G technology, but 4G will be the technology of the future. Incumbents Airtel - which has launched 4G - and Vodafone and Idea - who have plans to launch later this year or early next - are set to be pitted against the RJio-RCom combine on the latest data technology in a high-stakes 4G battle.


Jio has also accused COAI of deliberately preferring "to hide the fact" that the GSM lobby body is sharply divided on issues linked to pricing and holding limits of CDMA airwaves "for reasons best known to them".

A leading COAI member and the biggest holder of 800 MHz airwaves in the group, Reliance Jio, also junked the GSM lobby body's claims that only one member (read: Jio) did not back the industry body's position on pricing and holding limits of CDMA airwaves.

"COAI's efforts to project its submissions (on 800 MHz spectrum issues) as the views of an entire industry are surprising, when in reality many members have conveyed their disagreement on this matter," Jio wrote.

ET had first reported earlier this week that Norway's Telenor and Videocon Telecom had broken ranks with COAI members and exhorted the GSM industry body not to rush "one submission after another" on 800 MHz spectrum issues without "adequate discussions among all members".

Jio has also rebuked COAI for selectively objecting to portions of the M&A norms to drive home its argument that the 10 MHz cap for 800 MHz spectrum (outlined in the M&A rules) is in conflict with the March 2015 auction rules, which stipulate an in-band cap of 50% for such airwaves.

Jio, for instance, has pointed out that the M&A norms also permit 3G operators "to retain two blocks of spectrum in case of a merger, even though the relevant auction rules (read: NIA 2010) of such spectrum restrict holding to only one 3G block in case of a merger.