TELECOM
3G Face-offs
W
Economic and Political Weekly December 9, 2006
going to be in the mobile category, enabling mobile phones to access broadband is quite necessary. This is now possible thanks to the third generation (3G) technology.
In very simple terms, 3G technology brings wireless broadband data services to one’s mobile phones. Boasting speeds from 144 Kbps (roughly three times what is possible in a 56 k dial-up modem connection) to 2.4 Mbps (close to cablemodem speed), the 3G network is nothing but an enhanced data application along with multimedia.
While the interface is undoubtedly different on a mobile phone, the experience of surfing, downloading and streaming can be very close to that of a broadband connection on a computer. Worldwide, there has been a movement towards 3G technology. Not to be left behind, the government of India too has been clearing the decks for the mobile service providers to roll out 3G services as early as 2007. As a step in this direction it sought recommendations from the Telecom Regulatory Authority of India (TRAI) for working out the methodology for allocating spectrum for 3G services.
The TRAI has recommended three sets of frequency bands – 450 megahertz or MHz, 800 MHz and 2.1 gigahertz or GHz. The allocation of 3G should be treated as a standalone exercise and not as an extension of the existing 2G spectrum and the TRAI has recommended stiff penalties for non-compliance. According to the regulator, the allocation and also the waiting list, if any, of telecom service operators should be determined through a process of auction. For an all India presence, the recommendations imply a reserve price of Rs 1,050 crore to Rs 1,100 crore, above which the auctions will be held. As usual, the two competing technology providers, GSM and CDMA, have started trading charges and the GSM operators have accused the regulator of being biased against them. The GSM cellular operators had offered a maximum of Rs 300 crore for the spectrum, while the CDMA licensees had offered Rs 1,500 crore. Analysts feel that with the current recommendations, only five operators can be accommodated. This is because the spectrum available is not enough to accommodate all the operators and, therefore, a selection process may have to be carried out to decide which of the operators would be eligible to offer 3G services.
It is now very clear that the fast growth of telephones in the country was facilitated by one of the lowest tariffs in the world and one of the main reasons at to why the tariffs are so low is due to the competition between service providers. So the TRAI and the department of telecom (DoT) must ensure that the recommendations do not impede competition in the market for 3G services. This is especially so because the diffusion of 3G services worldwide has been very slow because of its high price and consumers are not fully convinced about the benefits of this new technology. Another sticking point in working towards the faster diffusion of 3G services is the availability of the required spectrum. The defence ministry has informed the DoT that the armed services would require additional time, up to 390 days, to vacate the 45 MHz spectrum which it currently occupies, which, in turn, is caused by the failure of both BSNL and MTNL to complete the alternative optic fibre backbone for the armed forces as per schedule. So it looks like the roll out of 3G services maybedelayedbyayear until the first quarter of 2008. Another important recommendation contained in the TRAI report is the establishment of a National Frequency Management Board, essentially to coordinate the availability of spectrum among various major users. This should go a long way towards ensuring the availability of additional spectrum, its efficient utilisation, planning and effective monitoring. Given the accumulated experience in this area from other countries, the DoT needs to explore all possibilities for a smoother intro-
EPW
Economic and Political Weekly December 9, 2006
