Even as successful resolution of the tricky spectrum allocation issue remains elusive, fuel has been added to the ongoing spectrum debate between GSM and CDMA mobile operators. The spark this time has been ignited by a remark from Telecom Regulatory Authority of India (TRAI) chief, Nripendra Misra, to the minister for communication, A. Raja, that auction of all spectrum ?? 2G and 3G ?? is probably the best way forward.
In a bid to get the government to be more accountable for the spectrum it uses and also pay for the resource, Misra, in a letter to Raja, suggested that government departments should be made to pay for the spectrum they use.
Taking the point further, he advocated auctioning of the additional spectrum. “It is essential that spectrum, a scarce resource, should be priced appropriately so that it encourages efficient utilisation and discourages non-serious players.Auction is an efficient and most transparent means to allocate spectrum.
As expected, both GSM and CDMA operators differed sharply on the issue.CDMA operators maintained that, as per the unified access service licence (UASL), each GSM operator is entitled to only 6.25 MHz of 2G spectrum and each CDMA operator up to 5 MHz, for free, linked only to subscriber numbers.Therefore, it made sense for the government to price further allocation of spectrum. In fact, Tata Teleservices Limited (TTSL) went a step further to state that if GSM operators were charged for the additional 2G spectrum allocated to them (beyond their contracted amounts), the government could earn more than Rs 17 billion in fees.
The Association of Unified Service Providers of India (AUSPI) noted: “It is no secret that spectrum allocation to the GSM operators has been way beyond the amounts contracted by their licence.
GSM operators took strong exception to this. In a letter to the minister, T.V. Ramachandran, director-general of the Cellular Operators Association of India (COAI), refuted the allegation that additional spectrum was being given away free to GSM operators. According to Ramachandran, “GSM operators are paying an extremely high charge for the additional spectrum allotted to them. Based on actual data collected, it had been estimated that the GSM industry has already paid an extra Rs 18 billion on account of additional allotments of spectrum, which is over and above the base 2 per cent spectrum usage charge paid by the industry to the government. Also, as per the existing regime, it is estimated that over the next three years, the GSM industry will end up paying over Rs 100 billion as spectrum usage charges to the government.”
GSM operators also did not agree with auctioning as the way forward. This would be completely untenable, they said, and would be in conflict with not only the existing licensing framework but also with the contractual settlement between the government and the GSM industry.
Although Raja assured that the government had no intention of auctioning 2G spectrum, the debate has only intensified.This, despite Misra’s clarification that TRAI was not demanding auction of 2G spectrum and was only informing the Ministry of Communication that amongst all allocation procedures, auctioning was possibly the best way forward.
Meanwhile, Idea Cellular has demanded a Rs 830 million compensation package from the Department of Telecommunications (DoT) for the delay in its allocating spectrum for the Delhi circle in 2002.Idea is facing similar delays in getting spectrum in Bihar, where it has not been able to launch mobile services despite having a licence since 2006. DoT, however, has claimed that it is not liable to pay any compensation to operators for delays in allocating spectrum. It has nevertheless allocated 5 MHz of spectrum in the 1800 MHz frequency band to Idea Cellular for launching GSM-based mobile services in the Mumbai circle.
Even as the tug of war over extra spectrum continues, it appears that despite the constitution of the group of ministers to help the defence forces vacate spectrum quickly, it will be a while before operators can look forward to additional spectrum.DoT is planning to set up a committee for spectrum valuation and pricing. The committee will examine all the relevant aspects of spectrum allocation including valuation and pricing. The setting up of the committee follows the defence forces’ likely delay in vacating spectrum till a secure alternative communications network is built.
Raja recently noted that the defence forces could take till the end of the year to free up spectrum for commercial use.
While admitting that DoT is conducting its own internal assessment to see where all the spectrum is being used by other agencies and whether there is any spectrum with other agencies that is not being used, Raja also pointed to the defence forces that its troposcatter methodology of using spectrum is highly inefficient, unreliable and obsolete. The ministry, in this context, asked the forces to take a look at international practices followed by countries such as the US, UK, France and Germany.
As we go to press, the finance ministry has also got into the spectrum allocation debate, recommending pricing of 2G spectrum as the best solution to the current impasse on the issue. The finance ministry supports the idea of fixing a fee for 2G spectrum, or asking operators to bid for spectrum through an auction system as it feels that it would force operators to utilise the scarce resource more efficiently.
