How an unrealistic DoT is stonewalling growth of 3G

New Delhi: Does the Department of Telecom (DoT) have any vision at all for propagating 3G services? Nothing is evident as of now.

The DoT is already fighting a long battle against telcos which entered into roaming pacts for 3G to offer services in those circles where they themselves do not have spectrum. This is bad enough. But now, DoT is also being bull headed about the future of 3G services by refusing to examine the issue of getting 15 mhz of spectrum in 1900 mhz band which it has kept aside for refarming of 800 mhz band which is currently used for CDMA services.

The band of 2100 mhz for 3G is the most mature spectrum (compared to other possible bands including 700 mhz or 4G) and has the best economies of scale for enabling affordable devices - critical for ramping up mobile broadband services, just like 900/1800 mhz did for 2G voice in the last decade.

Which is why the clamour for freeing up more spectrum for 3G use. The 15 mhz of 1900 mhz band spectrum which the Government is unwilling to release is actually needed by CDMA players only in 2022-23, when the present CDMA licenses expire. This means it is available for use for the next whole decade. Another point supporting a demand to free up this spectrum is that current CDMA devices (the phones which we use for CDMA) will not function using this 1900 mhz spectrum anyway and consumers will need to buy new phones when DoT does refarm this spectrum in the next decade. So why does DoT want to keep this large chunk of spectrum unused?

In a letter to DoT in February this year, Cellular Operators Association of India had raised this issue in detail. “We respectfully submit that it is unrealistic to leave the unused 15 mhz of spectrum in 1900 mhz band for the probable refarming of the 800 mhz band, as TRAI has recommended…….CDMA licenses were awarded in 2002/03 for a 20 year period and will not come up for extension for another 10 years. It is therefore necessary to derive economic value of this 1900 mhz spectrum band by using it for 2100 (3G) instead of keeping precious mobile broadband spectrum unutilized for a decade for a distant requirement that is unlikely to even arise”.

Why does this 15 mhz of spectrum in 1900 mhz matter so much?Because 3G operations drive mass market data services and operators are currently unable to offer lower tariffs or affordable devices because of the cost of acquisition of these airwaves, which was very high.

Now, they are faced with a chicken and egg situation: if they lower prices to drive affordability, mobile data usage will rise. This will mean poor quality of service because inadequate spectrum is available for a large upsurge in data usage (data uses spectrum more intensely compared to voice).

Not only is more spectrum availability of critical importance to 3G service providers, it will also act as a great revenue generator for the Government. Remember, one block of 2x5 mhz 3G spectrum was sold at Rs 16,700 crore in 2010 auctions. If one were to consider the pan-India 3G footprint of operators now, it is clear that in all circles, at least two or three additional slots are needed. This means at least two operators are not present in every telecom circle of the country, in some circles three are missing.

Take the case of metros: Delhi has only Bharti, Vodafone, MTNL/BSNL and Reliance. It has no services from Idea, Aircel or Tata Teleservices. In Mumbai also, Idea, Tata Teleservices and Aircel are absent. Bharti, Idea and Tata are absent in Kolkata.

So even now, the problem lies in too little spectrum being available for 3G services. The astronomical auction price for 3G spectrum or airwaves in 2010 ensured that no single telecom operator (except BSNL and MTNL) got pan-India spectrum. This is where the intra circle roaming pacts come in. Operators like Bharti, Vodafone or Idea etc had to enter into roaming pacts in those circles where they themselves did not possess spectrum but a competitor did.

An industry veteratn points out that because of this roaming facility, spectrum is also being used optimally. “For example, Bharti, Vodafone and Idea are sharing between them 10 mhz of 3G spectrum in Delhi since Idea is sharing spectrum from both Bharti and Vodafone. Similarly, only Vodafone has 3G spectrum in Kolkata and it is sharing this 5 mhz spectrum with Bharti as well as Idea”.

The DoT needs to help the 3G players survive.