Print

Comment

Email

Digg

Del.icio.us

Reddit

The spectrum starved telecom community is now facing the daunting task of convincing the telecom watchdog whether it should try to fix cap on operator numbers or permit combining technology under one license, among other issues.

Following the consultation paper floated on June 12, 2007, telecom camps have indeed suggested the way forward. If the government is focusing more on such consultation papers instead of giving special thrust on solving the ongoing spectrum scarcity, asking the defense sector to vacate spectrum, could impact the way telecom majors are running their businesses in India.

Feeling the Heat
Indian mobile users have already felt the heat with call drops becoming higher. Quality of service continued to hunt the telecom regulator. Mobile operators are still waiting for their spectrum and fresh licenses to run or expand business. Idea Cellular, which is keen to enter Mumbai, the most sought-after metro circle, is still in a dilemma.

The Indian telecom business may plunge into darkness if the government cannot offer additional spectrum by December 2007. A close look at the investment plans announced by leading telecom operators suggest that they need spectrum for extending their presence, and are keen to invest more than Rs 60,000 crore in fiscal 2007-08. 3G demands will increase investments later.

Investments committed by operators such as BSNL (around Rs 6,000 crore), Bharti Airtel (around Rs 14,000 crore), Idea Cellular (around Rs 6,000 crore), Reliance Communications (Rs 20,000 crore), Tata Teleservices (around Rs 6,000 crore), and Vodafone Essar (around Rs 10,000 crore) will trigger growth, but spectrum will be the key. New towers built would be around 80,000 to spur the growth.

The industry has set an ambitious target of 500 mn subscribers by 2010-11 and 700 mn subscribers by 2014-15. But reaching these milestones, which have been the envy of telecom CEOs abroad, may draw blood unless the government stipulates a clear policy. Telecom CEOs feel that it is important to have a clear roadmap on the availability of spectrum to meet the objective.

By 2010-11, when India is expected to achieve its goal of 500 mn user base, the total spectrum requirements of the industry will be to the tune of at least around 90 MHz spectrum. A clear-cut roadmap on spectrum will enable the government to plan the vacation and coordination of spectrum and also allow operators to plan the growth of networks.

	"The government will announce the policy for spectrum allocation by year-end"
	-Andimuthu Raja, minister, Communications and Information Technology

Communications and IT minister A Raja's efforts are yet to bear fruits. He had requested the defence department to spend Rs 5,000 crore for utilizing the frequency. According to the telecom ministry, 60 MHz of spectrum in different bands was lying unutilized with the defence forces, one of the largest consumers of spectrum.

The defence ministry has already demanded an alternate network for releasing 42.5 MHz of spectrum. BSNL is preparing an alternate network, which envisages Rs 4,000 crore investment for the defence forces, in order to vacate spectrum. However, DoT has already expressed reservation over the huge investment. More spectrum may be released after the defence sector vacates the radio frequency. But the industry cannot wait in the wings. Telecom minister's recent promise: The government will announce the policy for spectrum allocation by year-end.

Do we fear that one operator would control the market economy? Why cannot we offer spectrum and licenses to new players? The US has set an example. The Federal Communication Commission is set to govern a key auction of certain slices of airwaves wherein the door may be opened to non-telcos such as Google, DirectTV Group, EchoStar, Yahoo!, and Skype for grabbing wireless territory.

Leading telecom players such as BSNL, Bharti Airtel, MTNL, Idea Cellular, Reliance Communications, Tata Teleservices, and Vodafone Essar have expressed their apprehension over shortage of spectrum.

The immediate solution would be to promote technologies like WiMax-both fixed and mobile-and 4G, which are said to be less dependent on spectrum usage. The government should spell out its 3G spectrum policy soon and the policy framework on 4G can be kicked off. India can take cue from other countries which have begun 4G trials.

If the Indian telecom industry is allowed to engineer wireless infrastructure to look at VoIP technologies, it will be a boon for the business. On top of this, the government should stipulate stringent penalties on operators who are not managing spectrum efficiently. A clear roadmap on spectrum availability will also assist operators to finalize their investments and spectrum management.

The result of the June 12 consultation paper has divided the industry. There are holes in both industry camps since leading members have their own issues to be resolved, and have expressed their views independently.

The debate on M&A clauses started when Reliance expressed its interests in the then Hutchison Essar, and Vodafone, after grabbing Hutchison Essar, flexed its muscles in the Indian market.

Page(s)   1  2  3  4