The Indian telecom market, particularly in wireless, continues to grow and develop at a rapid pace. As in all developing economies, the continued growth of the telecom sector goes hand in hand with other infrastructure development and economic growth. The Indian government rightly has set a target of 200 million phone subscribers by the end of 2007. Of course, given the speed and cost advantages of wireless deployments, the vast majority of these new telecommunications consumers will be connected via cellular networks.The great leap forward in 2003 of the unified licensing regime, coupled with a much greater availability of CDMA and GSM handsets, and dramatically lower tariffs, have led to rapid acceleration of the number of Indian cellular subscribers.
This trend, which needs to continue in order to achieve the subscriber count goal, is now in danger of being derailed. Some incumbent operators, with support from interested foreign suppliers, are attempting to restrict consumers’ choice and availability of services, ultimately resulting in higher prices. While this hurts individuals, it also damages macroeconomic development and makes the 200 million goal that much harder to achieve. Telecom development in India can only continue if international norms and the government’s own stated objectives are adhered to.
As cellular systems around the world progressed from first-generation analog systems to second-generation (2G) digital standards, many improvements were made in network quality and capacity. The International Telecommunications Union worked to establish guidelines for IMT2000 or third-generation (3G) systems and the worldwide vision for the additional services that they could provide. The vision of 3G services began to be realised in October 2000 with the launch of CDMA2000??, the world’s first commercial 3G networks. The CDMA2000 family of standards offers high-quality voice, supporting speeds of 2.4 Mbps currently and up to 3.1 Mbps by 2006. In June 2005, there were over 185 million 3G CDMA2000 subscribers globally. With unified licensing in India, operators such as Reliance Infocomm and Tata Teleservices began offering CDMA2000 voice and data services, breaking the GSM monopoly and resulting in the rapid growth of the cellular market at lower tariffs. But this growth will not be able to continue beyond 2005 due to a lack of spectrum available to CDMA2000 operators, especially in dense urban markets such as Delhi and Mumbai. This is while GSM operators have three times or more spectrum than CDMA operators, will be receiving additional allocation in the future and have been able to deploy 3G services with EDGE.
In every other cellular market, operators acquire spectrum on an equal footing, independent of the technology they use. They are free to choose older 2G technologies such as GSM or more spectrally efficient and data-friendly technologies such as CDMA2000 or WCDMA. This policy encourages continued innovation and most efficient use of the radio spectrum, a limiTed resource in any country. Regardless of the technology choice, operators continue to deploy enhancements such as new voice encoders and improved network planning to improve their own efficiency and to be able to serve more customers.
In India, some have proposed that spectrum be made available inversely proportional to the efficiency in which it is used. In other words, a technology that is five times less efficient should get five times the amount of spectrum. This incredible suggestion, used nowhere else in the world would encourage wastage of valuable radio waves and discourage innovation. TRAI and DoT have both agreed on a policy of “technology neutrality”. This is consistent with the unified licensing regime. As per the August 6, 2004 TRAI press release, “the key objective of the Unified Licensing/ Authorisation Regime is to encourage free growth of new applications and services leveraging on the technological developments in the Information and Communication Technology area. Other main objectives…are to…ensure flexibility and efficient utilisation of resources keeping in mind the technological developments…and to ensure a level playing field.” It also allows any operator to provide wireless (or wireline) service for fixed or mobile use with any technology of its choice. It further implies “spectrum neutrality”, meaning that operators will have access to an equal amount of spectrum regardless of their technology choice. This encourages efficient use of spectrum, since, if they can support more subscribers in a given amount of spectrum, they can earn more revenue.
The government should put into place true technology ?? and spectrum ?? neutrality and provide equal access to spectrum for CDMA2000 and GSM operators. Users in cities and villages will gain by continued lower tariffs, greater choice, and more data services. And the entire country will be well served by being able to meet its goal of 200 million subscribers by 2007. While both industry leaders and a group of ministers may be tasked to look at this issue, the time to act is now. The clock is ticking.
