The Department of Telecommunications (DoT) has decided to take a stand ?? without waiting for the recommendations of the group of ministers (GoM) ?? and announce the allocation of additional spectrum as an interim measure to resolve the contentious spectrum issue.
Lack of adequate spectrum has been a long-pending issue, with telecom operators complaining that this has been the reason for the drastic decline in service quality and for their inability to roll out new services.
While both GSM and CDMA mobile operators have had their own concerns, DoT has, on its part, tried to create a level playing field by ensuring identical criteria for allocation of additional spectrum in terms of subscriber numbers. It has tried to bring parity between the two technologies by doing away with the condition that required CDMA operators to add more users than GSM operators to qualify for additional spectrum. Both GSM and CDMA operators will now be required to achieve the same number of subscribers in a circle to get extra spectrum.
Other than this, the new criteria are very much an extension of the existing guidelines, which allow spectrum to be issued in the ratio of 2:1. Thus, GSM operators will be allotted 2.5 MHz of spectrum while CDMA operators will be allotted 1.25 MHz of spectrum for the same number of subscribers. These criteria will be applicable with immediate effect.
Currently, GSM operators get 10 MHz of spectrum when their subscriber figure reaches 100,000 in the metros; for the same number of subscribers, CDMA operators get 5 MHz of spectrum. Now, CDMA operators will get an additional 1.25 MHz of spectrum when their subscriber base reaches 160,000 in Delhi and Mumbai. GSM operators will get an additional 2.5 MHz for the same number of subscribers.
CDMA operators will be allotted an additional 1.25 MHz of spectrum if they achieve a subscriber base of 2 million in Category A circles, 1.6 million in Category B circles and 900,000 in Category C circles. For the same subscriber base, GSM operators will be allotted 2.5 MHz of spectrum. In other words, as per the new criteria, a GSM operator will get spectrum beyond 10 MHz in two tranches ?? from 10 MHz to 12.4 MHz and 12.4 MHz to 15 MHz. A CDMA operator will get beyond 5 MHz to 6.25 MHz, while the sixth CDMA operator would start with a spectrum of 6.25 MHz and get an additional 1.25 MHz on achieving the prescribed subscriber base.
Needless to say, the operators are unhappy. GSM-based operators feel that the norms are too lax and that DoT ought to have waited for the GoM’s recommendations. CDMA operators, on the other hand, complain that the playing field is unfavourable for them.
B.V. Raman, CDMA Development Group’s country head for India, noted, “If what has been reported in the press is true, this policy is going not only against the advice of the regulator, but also the principles of global best practice. Continuing the current approach of unequal assignment of spectrum to service providers using different technologies under the same licence conditions would significantly dilute and distort India’s technology neutral stance. Not only this, it would deprive consumers of the benefits of technological advantages and value-added services.
What the service providers do agree on, however, is that the DoT-pegged subscriber numbers for additional spectrum allocation are unrealistically high. Also, as a telecom analyst points out, it is likely that GSM-based operators such as Bharti, Hutch and Idea may benefit more from these norms. For instance, Bharti, with a subscriber base of 2.1 million users in Delhi, can now get 15 MHz spectrum up from the current 10 MHz. Reliance, on the other hand, with 1.7 million users, will get 6.5 MHz and if it needs to get more spectrum (7.5 MHz, the next level) it will have to match Bharti’s subscriber base.
Extending the same reasoning, and going by the highest subscriber numbers of an operator, for Delhi and Mumbai, GSM and CDMA operators need to achieve a subscriber base of 2.1 million to get additional spectrum of 2.6 MHz and 1.25 MHz respectively. For Chennai and Kolkata, the subscriber base needs to be 1.3 million for additional spectrum. In the same Category A circle, the CDMA (fifth operator) will need 2 million subscribers for an additional 1.25 MHz, while a GSM operator will get 2.4 MHz for a similar subscriber base, and for the sixth operator in Category A circles, the subscriber base will have to be 2.6 million for both GSM and CDMA players to get additional spectrum.
According to operators, this will only lead to more confusion. The policy is ad hoc at best, they claim. And, as has become routine, is likely to lead to a new round of litigation within the industry.
