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Econmic Times, 21st October 2011, Editorial Page

Draft Telecom Policy 2011 lacks an operational framework

The writers, V Sridhar & G Krishna Kumar are wireless professionals based in Bangalore. Views are personal
The recently-announced draft Telecommunications Policy, 2011, lacks an operational framework. It has a clause on spectrum sharing, but recent DoT action to scrutinise the 3G roaming pacts of certain operators raises a fundamental question as to whether the government should put a stop to the actions of the operators who, by sharing the infrastructure and scarce spectrum, try to improve the efficiency of providing wireless broadband services.

This is not to say that operators can violate rules and regulations. However, since telecom regulations and policies are found to be trailing technology and practice for most parts, is it time to rethink about being flexible in our policy formulation and implementation?
Given the constraints in spectrum, lower disposable income of the general populace and the glaring rural-urban divide, telecom operators in the country indeed have done a tremendous job in their innovative offerings- often referred to as frugal innovation - to increase the utility of their subscribers. This is evident in the improved telecom penetration levels, low prices and the increased contribution of the telecom sector to the country's GDP: more than 3.5% currently.
By cooperatively sharing the spectrum, much like the passive tower-sharing as being practised as a norm in the industry, the operators can potentially reduce costs, optimally use the allotted spectrum and enlarge coverage areas, leading to the birth of 'secondary spectrum market' in India. As long as it increases the social welfare - i.e., profit of the operators as well as subscriber utilities - government shall not stand in the way. However, the process should be transparent so that all stakeholders, including subscribers and the government, are aware of the sharing pacts. Hence, the need of the hour is guidelines for spectrum-sharing for operators to follow.
Some CDMA operators use 800 MHz spectrum to provide 3G EVDO service. Though 800 MHz was allotted for 2G services, it is better suited for 3G services. This method of use, referred to as spectrum refarming, is not allowed in the policy. However, nobody is complaining as both the operators as well as subscribers earn positive net utility out of this initiative. Though the draft policy reiterates delinking licence (for the provisioning of services) from spectrum, appropriate interpretation and implementation is required relating to the above context.
Similarly, the recent move to cancel the licences of one of the spectrum winners of broadband wireless access (BWA) service on what seem to be minor deviations in the application process, might throw a spanner in India experimenting with leading-edge technologies in wireless broadband service (reports suggest this move is now being withdrawn).
The licensing procedure should be simple enough as long as scarce resources such as spectrum for providing the required service are priced and paid for appropriately. In a very good move, the draft policy advocates unifying different licences to just two - network service operator and service delivery operator - that should simplify the licence maze.
It is not that the government and regulator didn't track technology and market activities earlier. On some occasions, the policies were modified in tune with the market conditions. In early 2003, the government imposed access deficit charge (ADC), a cross-subsidy initiative wherein private telecom operators were required to pay to fixedline providers, mainly BSNL, for sustaining its rural wireline network. However, taking cognisance of the fact that ADC created an unfair tax burden on mobile, national and international long-distance service, and also to stop grey market operations, the Trai abolished the ADC in April 2008.

Another example is the changes brought out in the applicability of Universal Service Obligation Fund (USOF). Though NTP 1999 envisioned reimbursement of the net cost of providing universal service in rural areas from the USOF only to basic telecom operators, realising the role of mobile services in providing affordable communication services, the government enabled support for mobile services as well from the USOF through Indian Telegraph (Amendment) Rules, 2006.
To sum up, though the draft Telecom Policy, 2011, recognises convergence, technology evolution and market developments, the government and the regulator should interpret the broad policy initiatives within the context of improving social welfare and act accordingly. Thanks to the much publicised 2G scam, decisions in telecom are being stalled and postponed. Micromanaging by posing bureaucratic hurdles only will stall progress of telecom in the country and might turn the once golden goose of liberalisation to a dead horse!
 

Telecom Policy lags practice

Economic Times , Sep 7, 2011, 01.16am IST, Editorial Page

 

By: Vsridhar & G Krishna Kumar

The DoT panel looking at various issues for the forthcoming New Telecom Policy has recommended that the country be considered as a single region — instead of the current 22 circles — a move that will spare customers roaming fee while travelling.

Roaming fees for voice calls have dropped considerably in recent years thanks to intense competition. So, the proposal may not have a significant effect.
However, what is the effect of one-nation-one-market policy on 3G and broadband wireless access (BWA) services? In the case of voice roaming, the Trai regulation implemented in 2007 ensured no rental or surcharges can be levied by operators.
Trai has also regulated the maximum permissible per-minute charges for roaming calls, irrespective of terminating network and tariff plan. Moreover, multi-SIM mobiles have reduced the relevance of roaming. A user who often roams typically has two SIMs, one from an operator in the home circle and another from an operator in the roaming circle to reduce roaming charges.
With no operator holding a pan-India licence for 3G and only one operator for BWA — and assuming that the operators had a rationale and business models for picking up circles of their choice and paying the huge spectrum fee for the same in last year's auction — combining the circles for data roaming could be tricky.
A recent report says that the country has over 25 million data subscribers and about 49% of Internet users use only mobile phone for accessing the Internet.
In the initial stages, it will be the high-Arpu, post-paid subscribers in metros and category-A circles who will be the innovator segment to adopt 3G/BWA, and it is likely that the subscribers will use data roaming to a large extent.
Without a regulatory oversight, the larger operators are likely to have better bargaining power in the roaming negotiations and, hence, the smaller operators might be disadvantaged, both for originating and terminating roaming data calls.
In BWA, it is worse. The smaller Internet service providers that got the BWA spectrum are at the receiving end of pan-India unified access service providers who can leverage on the scale of their operations. As of now, data roaming charges are not regulated across the world.
EU has drawn up a three-year plan for reducing roaming tariff for data. As per the new regulation, subscribers will have to pay a maximum of 90 cents per MB of data by July 2012. The charges will go down substantially to 50 cents by July 2014.
EU has also defined ceiling charges for wholesale rates, between two operators. Some mobile operators have launched 3G services in circles without having won the spectrum for the same in the auction. Though not likely, the operator could have refarmed the existing 2G spectrum in the 900 and 1,800 MHz to offer 3G services.

This is being practised by some CDMA operators to provide high-speed data services in the 800 MHz they received for 2G services. There is consensus that the industry needs to move towards spectrum allocation independent of technology, thereby bringing in efficiency of spectrum usage. For example, earlier this year, UK's regulator Ofcom allowed refarming of existing 2G spectrum for 3G service.
Though the unified access service licence allows the operator to use any technology to provide any service including data and multimedia, legacy indicates that spectrum is associated with a type of service: 2G or 3G. Spectrum refarming explicitly disassociates spectrum from technology or service.
Another possibility is cooperative sharing of spectrum between the operators who have spectrum and those who do not. If so, even though there is no policy on spectrum-sharing between network operators, it indicates the birth of secondary spectrum market in India.
This type of sharing can occur between two spectrum holders within the same circles too. The operator that does not have the radio access infrastructure in specific geographical areas within a circle can possibly use the spectrum and the associated infrastructure of an existing operator to provide coverage that again will lead to optimal utilisation of spectrum.
These arrangements can also be construed as roaming, though not precisely. What is notable in both the above cases is that the ministry of communications and IT is yet to take a policy decision on refarming and spectrum-sharing, though it is apparently in the works at DoT to be included in the New Telecom Policy.
Though credit shall be given to the operators for taking these initiatives, without policy directives, the user is not adequately informed and even misinformed.
It is time that the much-hyped telecom policy is announced soon, with the above incorporated.