In a forward-looking move, A. Raja, minister for communications, has allowed number portability in select cities and outlined broad guidelines for a 3G policy.
For mobile users in Delhi, Mumbai, Kolkata and Chennai, who account for nearly 18 per cent of the total wireless user base in the country, number portability will be a reality by the fourth quarter of 2008.
The phase-wise introduction of number portability across the country is a big step as it will allow subscribers to switch operators without giving up their phone number.This will step up competition and force service providers to improve their services.
Meanwhile, outlining 3G initiatives, the Department of Telecommunications (DoT) stated that all radio frequencies for 3G services have to be offered via an auction process, in which all telecom companies ?? existing operators, licence holders and new international players ?? will be allowed to bid. This is a marked departure from the Telecom Regulatory Authority of India (TRAI)’s recommendations on 3G. According to a statement released by DoT: “The 3G licences will be granted through a controlled, simultaneously ascending e-auction, conducted by a specialised agency to ensure transparency in the selection process.”
The new base price for 3G spectrum (where each operator gets 10 MHz ) is likely to be pegged at about Rs 1.6 billion for Delhi, Mumbai and other Category A circles; Rs 800 million for Chennai, Kolkata and Category B circles; and Rs 300 million for Category C circles. These add up to Rs 28 billion for an all-India licence.
It is believed that in the first phase of 3G rollout, about 30 MHz of 3G spectrum will be available in the 2100 MHz frequency band. This will be allotted to three GSM players. If the government wants to accommodate more players within this quantum of spectrum, it will reduce the spectrum availability for each player.
The policy also stipulates that CDMA operators can access the available 1.25 MHz of spectrum in the 800 MHz band.However, they will have to pay an amount equal to the highest bid for spectrum in the 2100 MHz band.
Mergers among operators and reselling/trading spectrum will not be allowed during the first five years of rolling out 3G services. Besides, operators will have to contend with stiff rollout obligations including rural obligations. Failure to meet the stipulations will lead to penalties.
Raja has also announced guidelines for Wi-Max services. Wi-Max, which will provide a platform to increase broadband penetration in the country, will also follow an auction process similar to the one recommended for 3G services. Operators offering the service will be allocated 10 MHz of spectrum in the 2.5 GHz band, and will have to pay a base price, which has been fixed at 25 per cent of the price for 3G spectrum. Further, operators offering both 3G and Wi-Max services will be subject to an additional spectrum charge of 0.5 per cent of their total revenue, which will be increased to 1 per cent after three years of allotment of 3G spectrum.
While welcoming the move, the Cellular Operators Association of India points out that the new policy is not in accordance with TRAI’s recommendations, which envisaged 3G spectrum being given to only the existing operators in slots of 5 MHz each. Moreover, they believe that mobile number portability has been introduced to benefit select operators who want to enter the GSM segment. This might lead to poaching of subscribers from existing GSM players. Sunil Bharti Mittal, chairman and managing director, Bharti Airtel, however, says: “It should be introduced in all the circles simultaneously, not only in the four metros. Fixed line services should also be included in it.” He added that the introduction of mobile number portability is unlikely to affect margins as there will be a major churn of subscribers in favour of GSM operators.
CDMA operators, on the other hand, are happy with the development. According to them, the decision is an important step towards improved quality of service. Anil Ambani, chairman, Reliance Communications, has welcomed the move towards number portability: “This is a forwardlooking initiative. It is pro-competition, pro-consumer and, above all, pro-choice.For the first time, GSM operators in the four metros will face real competition.”
Shampa Bahadur
Note: As we go to press, Raja has ruled out selling or auctioning of 2G spectrum. Answering a Rajya Sabha query, he said that spectrum allocation would continue to be linked to subscriber numbers. He also stated that new applicants would be granted telecom licences as per the existing first-come first-served policy.
