Tata Teleservices is applying to liberalise its CDMA airwaves in at least four circles, a possible first step towards a spectrum trading pact with Telenor's Indian arm which needs to offer fourth-generation (4G) services to stay relevant in the country's competitive highspeed data market.
The Tata Group company has written to the telecom department (DoT) to liberalise airwaves in Andhra Pradesh and Delhi service areas by paying the market, or auction-determined, price for spectrum and is planning to do the same for Mumbai and Maharashtra, said three people familiar with the details.
Tata Tele's airwaves in the 800 Mhz band are well-suited for high-speed 4G services in the four circles which count as among India's highest revenue service areas. "The company plans to launch its own 4G service too, which will increase its value for potential buyers," another person said.
The company's name has been linked to several suitors, including Norway's Telenor Group, which owns Telenor India. While Tata Tele makes a good fit for Telenor's plan to expand into an all-India operation from just six circles now, the two reportedly do not see eye-to-eye on the purchase price of Tata Tele, which is saddled with debt of over Rs 25,000 crore.
But with spectrum trading rules being cleared by the Cabinet, Telenor can now buy just Tata's airwaves and launch 4G services in the lucrative circles of Delhi and Mumbai. If Tata Tele liberalises its spectrum in more circles, Telenor can expand its operations.
A company needs to liberalise its non-auctioned bandwidth by paying the March 2015 auction-determined market price before sharing or trading that spectrum. Moreover, Tata Tele needs to liberalise its airwaves to offer 4G services on its own as well.
Reliance Communications has also applied to liberalise its airwaves for sharing and trading them with Reliance Jio Infocomm.
Telenor currently has only 2G airwaves in seven circles but has operations in six and is looking for data spectrum to keep pace with larger rivals who have been offering high-speed broadband over 3G and are even launching 4G services. An email to Tata Teleservices did not elicit a response. A Telenor India spokesperson said the company continues to look for opportunities for growth but declined to comment on the specific query about interest in Tata Teleservices.
"Telenor India is focussed on growth in the six operating circles to offer superior value to customers. We continue to look for opportunities for growth and we will evaluate options that suit our strategy to be able to offer best value to our mass market customers," said Telenor India in an emailed statement.