New Delhi: The tussle for spectrum between existing GSM operators and aspiring ones is set to get a new twist with the Department of Telecom (DoT) echoing the position of the existing operators that they need more spectrum to maintain quality of service. DoT’s position, outlined in a draft memorandum of understanding (MoU) with the ministry of defence (MoD) for spectrum release, is contrary to the argument used by the telecom regulator for suggesting a tightening of the spectrum allocation criteria to existing operators two weeks ago.
“Its (spectrum’s) inadequacy will not only hamper the growth, but also adversely affect the quality of service. The spectrum congestion has been hampering telecom operators in their bid to expand network and consumer base... The present level of spectrum allocated to mobile operators is much below the international averages,” the draft MoU, yet to be ratified by both parties, said.
Telecom Regulatory Authority of India (Trai), in its recommendations on merger and acquisition rules on 29 August, had said that “evidence available with the authority” suggested that quality of service “has not been adversely affected by the availability or otherwise of spectrum”.
The MoU, first reported by The Hindu Business Line on Sunday, envisages the armed forces vacating 55Mhz of spectrum currently used by the Air Force in three phases: 5Mhz each in New Delhi and Mumbai immediately for second-generation (2G) mobile services (currently offered); 15Mhz for 2G across the country, 20Mhz in New Delhi and Mumbai and 10Mhz across the country for third generation (3G or data-rich) services by January 2008; and 10Mhz for 2G and another tranche for 3G services by April 2008. By April, telecom circles in the country are expected to have an additional 15Mhz to 30Mhz of spectrum for 3G services.
Mixed signals: Three young men check their mobile phones in New Delhi. The telecom regulator had earlier said that quality of service ‘has not been adversely affected by the availability or otherwise of spectrum’.
The memorandum, which calls on “all users” to utilize spectrum in an “optimum and efficient manner”, admits that the current method of utilizing spectrum by defence forces is inefficient. The MoD had earlier insisted on commitments from DoT on alternative networks for the Navy and the Army before releasing the Air Force spectrum.
According to the draft MoU, BSNL, the Army and the Navy have been left to thrash out the details of an alternate network for the two services. The Air Force is expected to switch over to the new fibre optic network next month, according to DoT officials.
Instead of an assurance on DoT funding the alternate networks for the Army and the Navy, the new MoU only says that DoT has to “take steps” to win approval, from the Telecom Commission and the Cabinet Committee for Economic Affairs, for the funding for the yet-to-be-designed networks. It, however, says the security level of the new networks for the two forces will be at par with that of the existing mode of communication, a major point of contention between the two ministries.
The funding for the two networks, estimated by DoT officials to be in excess of Rs3,000 crore, will be nearly three times what was spent for the Air Force network. DoT had initially refused to foot the bill for the two networks for the Army and the Navy, as it felt that their demands for separate networks, arising from security concerns, were not justified. With the 15-30MHz of 3G spectrum that will be released by the MoD, and the 3G spectrum already with it, DoT expects to have the required 40-50MHz for a four-player auction.
The MoU expects DoT to complete the cabling work on the 8,000km fibre optic link for the Air Force by this month, while the MoD is obliged to switch off radio emissions in the committed frequencies as soon as the fibre link is made available.
The quantum of voice or 2G spectrum envisioned to be released is higher than the 20MHz expected by the industry and will allow one more new player per circle than was previously thought. According to current allocation criteria, one or two new players will get spectrum or licence, whereas with the incremental 5MHz, Reliance Communications Ltd’s associate companies such as Swan Telecom Pvt. Ltd and Cheetah Corporate Services Ltd stand a better chance of getting in; other players such as Himachal Futuristic Communications Ltd and even recent applicants such as Parsvnath Developers Ltd may also get new licences in some areas, depending on whether and to what extent DoT tightens the criteria for giving spectrum to existing players in each licence area.