Unlicensed Spectrum: The virgin no one looked at

BANGALORE, INDIA: 'Necessity is the mother of invention'

Interestingly, it is the telecom sector this time that is getting a flavour of how new ideas generate with the scarcity of resources.

Also Read: WiMAX will play key role in pushing broadband

Highly competitive and pummeling for a slice of the sky, telecom has seen the past few days as another eventful concatenation of changes, especially with the spectrum auctions.

Usually spectrum is licensed by the government and is kept under strict observation of government and defense department, but use of unlicensed spectrum is not new.

There are certain sets of frequency bands which are free like 2.4 GHz, 5.84 GHz and 3.3 GHz; these have been kept aside as free spectrum that can be used by anyone without taking permission or paying loads of money as license fee.

Using unlicensed spectrum can be a great plan B, with the bonus of capital savings. Basically using unlicensed is the most ideal, cost effective solution in a country like India because of two reasons.

First and foremost, think of the pay-through-your-nose high license fees. Getting license for spectrum is not a child’s play. It needs a huge investment. Also the capital infrastructure required to set-up an unlicensed spectrum is five times less as compared to that of WiMAX network in a licensed spectrum.

Secondly, as there were 15 companies in the fray for three slots of 3G spectrum and two slots for broadband, it means 10 companies will be without licensed spectrum. So unlicensed spectrum will be the only available plan B.  

This seems to be quite easy and profitable option for the ISPs, however, then major telecom players such as Airtel, Vodafone, Reliance etc. do not follow this, simply because of the reason that this is not a game to be played by big players.

Although Tata Telecommunication was using this method to provide Internet service, it has now moved over to the licensed one. The future of unlicensed spectrum is quite bright because of limited availability of licensed spectrum.

It’s all about who is ready to drill the well first.

The author is telecom analyst at Prithemius Consulting