3G spectrum: A continued saga of delays

3G spectrum: A continued saga of delays

With the UPA winning the trust vote, the government is likely to announce the 3G guidelines in two weeks

Priya Padmanabhan

Thursday, July 24, 2008

BANGALORE,INDIA: Telecom firms and the industry association must have surely breathed an audible sigh of relief with the United Progressive Alliance (UPA) proving its majority in Parliament on Tuesday.

This means that the Government's long promised but still distant 3G spectrum allocation proposal would be on course.

In early July, the Department of Telecommunications (DoT) was considering a proposal to issue tenders for nine 3G licenses in place of an earlier proposal that would have seen five such players across the sub-continent.

The proposal would resolve the long awaited industry demand over spectrum availability. The DoT had earlier earmarked 25 MHz spectrum for 3G services on the 2.1 Gigahertz band to be auctioned to five operators-one of them being BSNL. This was recently raised to allow nine operators with the ministry having identified bands for over 20MHz of additional spectrum.

The Telecom Regulatory Authority of India (TRAI) and DoT have been battling over issues including base pricing of the 3G spectrum auction and the more contentious issue of allowing foreign operators to join the telecom fray.

While TRAI demanded that the auction be limited to existing players, the Ministry wants to involve foreign players to drive in investment and innovation. It is emerging that the Communications and IT ministry's decision would prevail on both these counts.

Government has arrived at a reserve price of about Rs. 2,260 core for telecom companies that want to be part of a pan-India auction for third generation (3G) spectrum in the upcoming policy. This is double the reserve price recommended by the Telecom Regulatory Authority of India (TRAI) in its recommendations in 2006. Foreign telecom service providers are also expected to bid for the spectrum, albeit at a higher rate.

The government hopes to cash in up to Rs. 40,000 crore through the 3G spectrum auction. Incumbent players like Bharti Airtel, Vodafone-Essar and Idea Cellular, and new players are expected to participate in auction along with foreign companies.

It is not just financial and business considerations that have caused the inordinate delay in the 3G spectrum allocation. There is also the issue of defence ministry agreeing to vacate around 25 MHz of spectrum to meet the needs of telecom operators. Defence minister AK Anthony has gone on record stating that the National Security Advisor (NSA) is examining all recommendations made by the defense, communication and information technology ministries before releasing the radio frequencies, to ensure national security is not compromised.

Market watchers contend that further delays in moving ahead on the issue could cause staggered investments in the 2G space.

However, what is encouraging is that the ministry is likely to announce the 3G and WiMax guidelines in two weeks' time.

Why is 3G important?

3G stands for the third generation of mobile phone standards and technology superseding 2G. It is based on the International Telecom Union (ITU) family of standards.

3G technologies allow network operators to offer its subscribers a range of advanced services and also achieve better network capacity. Services include wide-area wireless voice telephony, video calls and broadband wireless data, all in a mobile environment.

Besides these VAS, 3G can find potential use in facilitating initiatives such as e-governance, education and tele medicine. Given India's booming mobile market and extensive network coverage, mobile broadband could be the answer to taking the e-revolution to the last mile.

As on December 2007, 190 3G networks were operational in 40 countries according to the Global Mobile Suppliers association

©CyberMedia News

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Ahmed Muzammil said on 7/25/2008 6:37:19 PM:
Why doesnt the UPA Government think of releasing 3.5G guidelines...? Its already, time to adopt 3.5 G... Since 3G is getting outdated... Why is it that India adopts Latest Technologies LATE...?

to Ahmed Muzammil

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