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Telecom operators are up against IT and communication minister A Raja's attempt to free himself off the responsibility to give new telecom licences and spectrum at low prices. Labelling it as unsupportive and a 'step backward’, operators felt it would prove to be a hindrance in the vital foreign investment. They said it would also discourage consolidation of the Indian telecom market.

The stakeholders have conveyed their view to the Telecom Regulatory Authority of India (Trai), which is preparing its response to the Department of Telecommunications (DoT) proposal.

Earlier, on Raja's instance, the telecom commission had suggested that for new telecom licensees, promoters should not be allowed to sell their stake for three years. Yet, funds could be brought in via fresh shares. Association of Unified Telecom Service providers of India (AUSPI) had opposed to the move saying that any such provision must be for future licensees.

Telecom operators Vodafone and Reliance Communications Ltd have also expressed doubts over the move. They have reportedly said that in the absence of such a clause, the telecom sector has made remarkable progress and that there is no need for bringing about the lock-in period. India currently has 12 operators, with potential to advance further. The most obvious consequence of this fragmentation for efficiency would be in terms of spectrum, they said. Vodafone further stated that inefficient operators limit efficiency. In these circumstances, consolidation would have proven to be advantageous for the customer.

Cellular Operators Association of India (COAI) feels that huge resources are required for the next phase of rollout into rural and remote areas. It recommends a system of policy and regulation that attracts foreign investment, which it believes would play a central role here. On steps to avoid fly-by-night operators, RComm said, there was no need to impose any new clause in the telecom service areas and that such barriers only de-motivate the industry.

Swan Telecom, new licencee and global partner of Arabic telecom giant Etisalat, would have come under the purview of the lock-in period policy, had the government imposed it. Palpably, it too has been critical of the move. It said that any such move would limit expansion of the companies, leading to lesser companies and lesser competition.