Are we maximising telecom spectrum potential?

After deliberations that have dragged on for months regarding the price of extra 2G spectrum, exceeding the 6.2 Mhz limit that is in the possession of certain top telecom operators like Bharti Airtel, Vodafone, Reliance Communications, Tata Teleservices and Idea Cellular, the Telecom Commission representing DoT will meet this week to consider a one-time charge for the extra spectrum.

 According to CAG’s report, the extra spectrum held by established operators may have caused a loss of about Rs 37,000 crore to the exchequer. From the time of this revelation, a number of redresses have been suggested such as taking away the extra spectrum, fining operators for excess spectrum, spectrum refarming, spectrum sharing and rewarding operators who have rolled out more services in rural areas – all which have only seemed to further complicate the matter. TRAI and DoT also came to confrontation regarding differences in the two telecom bodies’ proposals for solving this issue.

For instance, while TRAI suggested that the Uniform License Fee should come down to six percent, DoT proposed that the ULF should not be less than 8.5 percent. TRAI also felt that it should be in charge of reviewing spectrum usage, while DoT said that WPC is already in charge of this function. TRAI and DoT also had differences on funds for spectrum refarming, roll-out obligations, whether established or greenfield operators should be given spectrum first, as well as the pricing for GSM and CDMA operators.

The suggestion of spectrum refarming and pooling of spectrum was put forward last year by the Tata’s, to maximize the potential of available scare spectrum resources by all service providers pooling in their extra resources and each dipping into it as needed. However, this suggestion never gained action, due to differences amongst operators and telecom authorities on sharing policy.

Telecom minister Kapil Sibal says that all telecom-related issues including spectrum pricing and allocation should be solved by October this year, while the DoT had earlier last month said that the spectrum allocation policy would be approved by November 30. Amidst all this, the third charge sheet for the 2G spectrum scam case has also been postponed for the third time possibly till the end of July, from its original filing date of first week of July, due to a fresh crop of documents submitted by Essar to prove its claim that Loop Telecom which was involved in the 2G scam was not a front for the group.
3G was bought at a whopping price of Rs Rs 67,719 crore by nine telecom operators and was slated to drive mobile advertising, broadband, WLAN, telecom manufacturing, work-from-home, drive untapped markets, and serve as a growth impetus for operators. Yet telecom equipment vendor revenues dropped 2.5 percent at Rs 1,17,039 crore in 2010-11, from Rs 1,20,069 crore in FY 2009-10. While a major reason for this was thought to be security issues with regard to import of Chinese equipment – which make up a majority of 3G equipment suppliers to the Indian market, there are also other issues. Top operators claim to have lakhs of subscribers for their 3G services in just six months of 3G operation, with video-calling and mobile TV being the most popular services. However, customers paint a different picture – claiming to being charged for 3G services which they are not receiving, breaks in the 3G network while downloading and video-calling, inability to use 2G and 3G simultaneously and other network issues which operators blame on initial rollout technicalities.
But the question is why roll out 3G on a network that isn’t 3G-ready? That is not a way of recovering quick ROI for the amount spent on the spectrum auction process.  

Huawei said yesterday that it will be rolling out its 4G solutions by December, while Ericsson and NSN have already conducted successful 4G field trials in India. However, BWA rollouts are not expected before 2012.

In the race to constantly leap-frog a generation of technology to keep up with the rest of the world, are we missing out on perfecting our existing technology in India, and denying an 800 million subscriber base of quality services, in a bid to offer a huge quantity of technology? And another question – why are paying subscribers always at the mercy of differences between governing telecom bodies and telecom operators, who argue ceaselessly about additional spectrum and steps to garner more revenue from the same, when existing spectrum is not being harnessed to its full potential?

By Beryl M

[email protected]