TRAI gears up for 2G allocation policy

Regulator set up a spectrum cell to look at 2G and 3G allocation policy and pricing

Bhaskar Hazarika

New Delhi, February 15: Auctions for third-generation (3G) spectrum may have delayed, but there could be hope for telcos waiting for allotment of 2G spectrum. Telecom Regulatory Authority of India (TRAI) is readying itself prior to the allocation of 3G and 2G spectrum by setting up a spectrum cell. The spectrum cell would facilitate recommendations for both 2G and 3G allocation policy.

Department of Telecom (DoT) had received 232 applications for Unified Access Service License (UASL) till September 25, 2007. Of the total 122 applicants have been Letters of Intent (LoI). Apart from existing telecom companies seeking for additional spectrum, new operators such as Sistema Shyam, Uninor and S Tel are in the queue to receive fresh spectrum in some of the selected circles.

This move comes after the regulator received mixed response from the telcos on allocation of additional 2G spectrum. The regulator is yet to take a call on auctioning of 2G spectrum.

A senior official from the ministry of communications and IT told Financial Chronicle that the spectrum cell would include experts dealing with spectrum allocation and auctions. “At present the spectrum cell has two people, one from TRAI and the other from Wireless Planning and Coordination (WPC). Additional number of experts are likely to join the cell, which will look at different aspects of spectrum allocation and pricing,” the official said.

He said that the spectrum cell has been created with the objective to look at the minute details on the auction of additional 2G spectrum. “There have been mixed views on the auction of 2G spectrum. The regulator is yet to decide if 2G spectrum should be auctioned to telcos, up and above the start up spectrum of 4.4 MHz or above 6.2 MHz. Also there have been discussions on the pricing of 2G, the expert committee will take a call on formulating the recommendations. It would also look in to sharing and trading of spectrum, cap on the number of service providers in a circle and merger and acquisition,” the official added.

The operators have been demanding early allocation of 2G spectrum, prior to the start of 3G auctions, which is scheduled to take place in September 2010. Telecom regulator is working to come up with a consultation paper on allocation of additional 2G spectrum.

WPC, wing under the Ministry of Communications and IT, is responsible for spectrum management. In a recent move WPC has written to the ministry for hiring experts for managing the 3G spectrum and WiMax auction processes. With 3G and WiMax spectrum auctions round the corner, WPC has sought for additional manpower to manage the auctions. With this initiative from the regulator in setting up the spectrum cell, it is unlikely that the government would grant additional manpower to WPC.

© Financial Chronicle

NY Special: What if India leapfrogs to 4G?

Bhaskar Hazarika

New Delhi: India has already missed the bus to launch third-generation (3G) mobile services in the country. But this could be a blessing in disguise for the mobile operators if India leapfrogs to fourth-generation (4G). According to industry experts, Indian operators can move forward to 4G without rolling out 3G services. This could be another instance when India’s neighbour Pakistan is planning to leapfrog to 4G services.

Globally number of countries is testing 4G on the network after implementing 3G on the network. However, for India we are yet to log on to the third-generation services. Leapfrogging to 4G would prove to be a technology advantage for operators, since the 4G technology is 10 times spectral efficient compared to 3G. The 3G frequency bands identified by the ministry of communications and IT are compatible to roll out 4G services.

Joint secretary, department of telecom (DoT), JS Deepak said, “4G frequency bands or Long Term Evolution (LTE) is under consideration with DoT and Wireless Planning and Coordination (WPC). The ministry is carrying out a study on the 700 MHz frequency band if it could be used for WiMax or fourth generation (4G) services.” It should be noted that the government has taken a ‘technology neutral stand’ on the spectrum to be allocated for 3G services. This could be the first initiative from the government to open a window towards the 4G space.

Long Term Evolution (LTE) version 10, which is considered to be 4G, is being designed and will be available by the end of 2010. The present day LTE under implementation is considered as 3.9G. Since the spectrum for 3G will be available for private telecom operators by August 2010, it would be the right move for India to go for 4G, as the equipments for 4G will be available by the end of 2010. Union minister for communications and IT, Andimuthu Raja clearly stated, “Allotment of spectrum to maintain level playing field will be allotted to the successful bidders by August 2010.”

According to telecom expert and former advisor of Telecom Regulatory Authority of India (TRAI), Satyen N Gupta India should leapfrog to 4G and skip 3G, as there has been delay in the auction of spectrum. Gupta said that time is ripe for India to directly move to 4G. “Government and the regulator should be technologically agnostic while allocating spectrum. There should be no mandate that the proposed 3G spectrum should be used only to roll out 3G services. The operators should be given freedom to offer either 3G or 4G services,” Gupta said.

He said that the existing 3G frequency bands, which the government is planning to auction is compatible to offer 4G services. All the 3G frequency bands, which are under International Mobile Telecommunications (IMT), can be used for 4G. The Indian government has identified frequency bands in the 1.9 GHz to 2.1 GHz for auction.

Chief corporate affairs officer, Idea Cellular, Rajat Mukarji said that moving to 4G is a desirable direction… Yes, 3G can be leapfrogged. “We have been talking about 3G for more than 3 years and may be it has lost its meaning. Moving to 4G is a logical direction. We talk about mobile broadband but we should know that it is critical for the country. From the existing 2.5G to 4G is a quantum jump, but on thing that should be noted that it will be expensive to roll out 3G services at this point,” he added.

According to ABI research, the total number of 4G subscribers worldwide, including both LTE and WiMAX, is expected to exceed 90 million in 2013.

What is 4G?

4G technology is sometimes referred as ‘MAGIC,’ --- Mobile multimedia, Anytime-anywhere, Global mobility support, Integrated wireless and Customized personal service.

4G has three major characteristics: The download speed is 100 megabytes per second; It is based on internet protocol technology; Ubiquity as it is interoperable with the lower generation technologies. The distinctive quality of 4G networks is likely to use a combination of WiMAX and WiFi. The International Telecommunications Union (ITU) and The Institute of Electrical and Electronics Engineers (IEEE) have identified that 4G will have data download speed of 100-mega bit per second and it is completely based on IP technology.

© Financial Chronicle

Stay on 10-digit mobile number, 'ENUM' the solution

E-numbering can help avoid 11-digit regime

Bhaskar Hazarika

New Delhi, December 23: India can adopt telephone number mapping to avoid migrating from 10-digit mobile number to an 11-digit number. The ever-increasing number of fresh subscribers every month has exhausted the allotment of new serial mobile numbers available with the department of telecom (DoT), forcing the industry to seek migration to the 11-digit solution.

The national numbering plan 2003 was formulated to meet the growing mobile subscriber base in the country. The 10-digit numbering pattern was projected to meet the industry growth figures for the next 50 years. However, the 10-digit number series has already got exhausted in six years.

The ENUM or electronic numbering is a technology adopted by some of the mobile-rich countries to meet the growing requirement of the mobile industry. The ENUM technology is being adopted by Malaysia and the UK to meet the increasing number of telecom subscribers.

Telephone number mapping is the process through which the telephone network (public-switched telephone network) is unified with the Internet address using the Internet protocol (IP). This technology will be similar to the model available in Internet connectivity whereby each Internet connection has a unique IP address.

According to telecom expert Satyen N Gupta, “The problem of a single universal personal identifier for multiple communication services can be resolved using this technology. Once adopted, the numbering pattern will not require migrating from 10 to 11 digit or more despite surge in the mobile subscriber base.”

A senior DoT official told Financial Chronicle, “So-me countries where there is unprecedented growth in mobile (subscribers) are adopting new technology to meet the number crunch. We are aware of ENUM or telephone number mapping, but have not taken up the project.”At present, technology companies such as Telcordia Technologies and Neustar Inc are offering the number mapping.

When contacted, secretary general of Association of Unified Service Providers of India (Auspi), S C Khanna said, “There are technologies that could be adopted to meet the growing demand but migration to 11 digit is an easier route. With more than 8 to 9 operators in a single circle and a couple of new operators likely to launch services, we need to meet the crunch.”

© Financial Chronicle

Foreign telcos ask Trai to fix bandwidth price

New Delhi, Dec 18 2009

Bhaskar Hazarika

Global long-distance carriers BT, AT&T and Cable & Wireless have sought the intervention of Telecom Regulatory Authority of India (Trai) to create a wholesale bandwidth-pricing regime to regulate “the higher bandwidth prices in the country.”

These global operators petitioned the telecom regulator, arguing that a wholesale pricing regime would cut down bandwidth cost for the end-consumer. Apart from these global long distance carriers, Indian operators like Sify, Spectranet, and RailTel, too are in the bandwidth retail business.

There are nine submarine cable networks that offer the bandwidth to long distance carriers here. Tata Communications (formerly know as Videsh Sanchar Nigam) owns five submarine cables, Bharti has two, Reliance Communications one and the consortium of Bharti and Reliance owns another network. Long distance carriers like BT, AT&T buy bulk of bandwidth from these wholesale vendors and further retail it to end-consumers.

A senior Trai official, who did not wish to be identified, told Financial Chronicle that the global carriers had written to the regulator to set up a wholesale pricing regime. “At present, we have a retail pricing on bandwidth but there is no regulation on the wholesale pricing. The regulator is looking at the recommendations made by the carriers on the wholesale pricing,” he added. He said the “bandwidth prices in India today was $5-9 million per 10 gigabytes compared to $1.5-1.7 million in other countries in Asia.”

An email sent to Tata Communications went unanswered.Commenting on the need for a wholesale pricing regime, former Trai advisor, S N Gupta, said, “Once the regulation on the wholesale pricing is done, service-based competition will increase leading to a cut in prices. Asked if the entry of new vendors would ease the pricing, he said entry of new players would not bring competition in this space but would only increase the capacity.

Asia’s privately-owned submarine cable network, Pacnet, is another player, which is setting up a submarine cable network in India under the West Asia Crossing (WAC) project. With the entry of the new player, there will be 10 cable networks in the country.

© Financial Chronicle

Mobile customers shying away from post-paid

Only 3 per cent of the subscriber base is in post-paid

Bhaskar Hazarika

New Delhi, Dec 16 2009

India is set to cross 500-million mobile phone users by the end of the year. But just about 3 per cent are still logged onto the post-paid story. This means a mere 15 million consumers actually pay regularly on a monthly basis for their connection. The rest, a staggering 485 million, are literally free birds who charge their phones with denominations they deem fit.

This explains the steep fall during the past five years in postpaid connections. The prepaid subscriber base has grown from 84 per cent five years ago to more than 97 per cent today. Majority of the 15 million existing postpaid connections fall in a particular socio-economic category that pre-supposes a mid to high-income level segment.

The 15 million figure is an interesting pointer to the actual size of the Indian middle income groups, especially viewed in context of the fact that India as of today has close to 35 million income tax payers (as on March 31, 2009), 10.2 million Demat account holders and 12 million registered passenger vehicles.

The shift from post-paid to prepaid has an explanation. T R Dua, director general of Cellular Operators Association of India, in an email communication, told Financial Chronicle, “There has been an increase in prepaid subscriber base as the service providers are increasingly expanding to the rural areas and are acquiring more and more subscribers from the bottom of the pyramid.”

He predicted the migration trend to continue arguing, “Prepaid would continue to be the preferred choice, as it is economical and enables the rural subscribers to control their costs. Prepaid also enables service providers to reduce their bad debts.” Easy availability and accessibility of prepaid mobile cards was also encouraging migration from the postpaid model to prepaid.

An analysis of the latest subscriber data suggests that the decline in the postpaid subscriber base is also evident from the fact that more and more new subscriber additions are in the prepaid segment.

Telecom operator Bharti Airtel has a prepaid customer base of 95.2 per cent as on quarter ended September 2009. The prepaid subscriber base for the company increased from 92.9 per cent in September 2008. At Reliance Communications, for the quarter ended September 2009 the prepaid subscriber base stood at 94.4 per cent. For that quarter the net subscriber additions in the prepaid was 99.2 per cent.

“In the past five years, the telecom subscriber pattern has witnessed a paradigm shift from postpaid to prepaid regime due to the competitive tariffs and innovative offers by operators, making universal rates for prepaid and postpaid,” director (telecom) of KPMG, Romal Shetty said. He added that the Indian telecom market, which started with a dominant postpaid subscriber base, is eventually witnessing the phenomenal growth of the prepaid category.

“Earlier prepaid call rates were higher compared with postpaid. However, as the market is maturing, the call rates have gone cheaper making it equivalent to post paid. There are three major reasons why the prepaid model is picking up in India-- quick availability, easy documentation and fast activation of service. At present, only a small per cent of the corporate employees are on the postpaid platform,” Shetty said.

©Financial Chronicle