A two-month delay in laying out a new communication network for India’s defence forces, who in exchange were to vacate wireless frequency that would have been used by mobile-phone service firms, will result in a further deterioration in the quality of wireless services in large cities and push back the introduction of a new cellular service—commonly called third-generation or 3G standard—yet again.
The creation of an alternative communication network—which would have up to 10,000km of fibre optic cables—for the defence forces is not likely to be over “before the end of August,” a senior official in the department of telecommunications (DoT) said, asking not to be identified.
The network was to be built and handed over to the defence forces by early July as a precursor to the army, navy and air force shifting a part of their communications to it from wireless media they currently use.
Late in 2006, state-owned Bharat Sanchar Nigam Ltd (BSNL) had awarded a Rs591 crore contract to information technology vendor HCL Infosystems Ltd to put up a dedicated fibre optic network connecting tens of defence establishments across the country. In return, the army, navy and air force were supposed to vacate a total of around 42.5 megahertz, or MHz, of spectrum in the 1800 and 2100 MHz bands.
Of this, 20 MHz was to be parcelled to existing operators and the rest to 3G service aspirants by DoT.
BSNL chairman and managing director A.K. Sinha, who was travelling abroad, could not be reached for comment and other executives at the state-owned firm said they could not confirm the exact quantum of delays. HCL Infosystems did not respond to queries on the issue.
The delays in setting up the network for the defence forces and the resultant delay in frequency being available for wireless services will affect services in large Indian cities. “In the top 48 towns of the country, the scarcity of spectrum is affecting the quality of service and it should be given as soon as possible,” said S.C. Khanna, secretary general of the Association of Unified Service Providers of India, a trade body that represents CDMA (short for code division multiple access) and landline telecom operators.
Congestion levels on mobile-phone networks are rising with the surging cellular subscriber base, resulting in increasing loss of calls and poor quality of service, India’s telecom regulator said in a quality of service report on Monday.
Cellular firms will also likely miss an opportunity to launch lucrative services such as 3G, another industry expert pointed out. With services such as Wimax maturing rapidly, Vishal Malhotra, partner with audit firm Ernst & Young, said operators have to look at launching value-added services such as 3G without waiting long. “Operators have to look at the cost of not entering the value-added services market properly at a time when alternative channels for the delivery of such services are fast evolving,” he added.
The delay will mainly affect public sector units BSNL and Mahanagar Telephone Nigam Ltd, both of which have already awarded contracts for installing 3G wireless equipment to vendors such as Motorola Inc., Nokia Oyj and LM Ericsson Telephone Co. Private-run phone firms are yet to start purchase or installation procedure for 3G equipment in a market that has the lowest phone tariffs in the world and yet sees regular price cuts almost every month due to intense competition.
“Most private operators would be neutral on this because while there is the opportunity cost itself, there is also the fact that we have a mobile penetration rate of less than 20%. 3G at this point will force operators to open one more front in their battle for subscribers, which most would rather not do,” said the chief executive of a large cellular firm, requesting anonymity because a formal announcement of the delay in issuing 3G licences had not been made.
Leading operators Bharti Airtel Ltd, Tata Teleservices Ltd, Hutchison Essar Ltd (to be renamed Vodafone Essar soon) and Reliance Communications Ltd have all said they will participate in an auction for 3G service slots when it is held. Ushering in of 3G services was first expected in April but later postponed to July.
Telecom regulator Trai had, in September last year, recommended to the department of telecommunications that 25 MHz of spectrum in the 2100 MHz band be auctioned to five operators for starting high speed data 3G services. It had also requested the government to accommodate additional operators after freeing up more spectrum being used by the defence forces. The government had, early this year, announced that it would wait for an extra 22.5 MHz spectrum to be freed up in the 3G band.
The defence forces have expressed their reservations on moving to the optic fibre-based communication system over fears of physical disruption by attacks. “The (armed) services have got their own concerns about security. We have to be careful,” defence minister A.K. Antony told reporters on Monday when asked about defence forces vacating the spectrum.