Spectrum allocation not fair: Tata Indicom chief

MUMBAI: It all started with a letter, Ratan Tata wrote to the Prime

Minister's office, showing his displeasure at the way spectrum was

allocated to cellular operators in India.






The government allocates spectrum to mobile companies based on the
subscriber base. This would not work in Tata's favor, as do not have the

subscriber numbers that players like Airtel, Hutch, BSNL or even Reliance

boast of.






All was fine in the late nineties with two mobile operators per circle.
All that changed with the entry of the third and fourth operator in the

circle and the ever-increasing cellular subscriber base.






Since, code division multiple access (CDMA) is a better (also newer)
technology as compared to time division multiple access (TDMA) used by

global system for mobile communication or GSM operators, the government

decided to allocate additional spectrum, maintaining a spectral

characteristic factor of 2:1 in the favour of GSM players versus CDMA

operators.






The spectrum is provided free of cost to mobile companies, and the Tatas
had offered to pay Rs. 1500 crore for the same. But the government chose

to ignore the offer.






It is not a fair move, feels Darryl Green, CEO, Tata Teleservices.
“Indeed CDMA technology has a better utilization of spectrum, but that

should not be the reason to provide lesser spectrum to CDMA operators,”

he says.






Those who support the move, argue that it is necessary to provide lesser
spectrum to CDMA players, 'to level the playing field'.






Green counters, “It is one of the chief advantages we have over GSM
operators who have been in the market for years, and is in line with basic

international practices. GSM operators have a whole lot of other

advantages, for instance, the price of GSM mobile handsets are lower as

they do not have to pay Qualcomm any royalty fees. So why take away the

advantage we have?”






Green considers the spectrum allocated to mobile players is already quite
less. “It hinders with our plans to roll out advanced services, like

data applications that consume more bandwidth. Also, we are unable to

chart a course for the future, as we cannot make any concrete plans for

the next two-three years,” he says.






“CDMA is a difficult technology, difficult to tune but very efficient to
maintain. CDMA gives twice the data throughput provided by GPRS (general

packet radio service),” he adds.






Green also mentions that the best utilization of the technology happens in
the rural or non-urban areas, as CDMA signals are available in the range

of 60 kms from the base station.






He agrees that GSM players have made heavy investment in their operations.
But he feels that should not be the criterion on allocating additional

spectrum, “otherwise the dominant player will never be challenged,” he

adds.






“The ideal way would be to auction spectrum or even a fee-based
structure,” says Green. He dismisses the fear that some operators might

hog the spectrum, “at the rate the market is growing, hogging is not

going to happen,” he says.






“Another option could be the 1900 Mhz spectrum, currently used by the
Defence. The operators could bear the cost involved in defence sector

shifting to a newer spectrum bandwidth. I believe they are open to it. We

need to look at newer options, as the current system seems to be a

mechanism for granting favours,” says Green.






Reliance Infocomm, the other CDMA operator, has still not spoken on the
issue. Thereby, Tata is the only player who is disputing the move. Tata

Teleservices has approximately nine million subscribers in India, close to

half of Reliance.






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