3G policy awaits Raja nod, set to pave way for new players
The policy for third generation mobile (3G) and wireless broadband services (WiMax) is all set to finally see the light of day ‘very soon’. After deliberating on telecom regulator Trai’s recommendations on WiMax for over a year, the Telecom Commission (TC), the apex body of the department of telecom (DoT), has finally submitted its policy report to communications minister A Raja.
As reported last week by ET, the TC is learnt to have recommended that radio frequencies for offering 3G services be offered via an auction process, where all telcos — existing operators, licence holders and new international players — are allowed to bid. The policy will be announced after the TC report is approved by Mr Raja. The TC report marks a change from sector regulator Trai’s recommendation that only existing operators be allowed to bid for 3G spectrum during the auction.
If Mr Raja approves the TC report, global telcos — who have so far not entered the India telecom market — can do so through the 3G route. At present, all telecom services in India are offered on 2G (second generation radio frequencies). Since 3G spectrum can be used both for voice and high-speed data applications, any new player who wins the bid for 3G spectrum can also enter the traditional voice and SMS market.
However, the catch is that the spectrum for 3G services is yet to be vacated by the defence forces. In fact, India has missed multiple deadlines for the vacation of 3G spectrum, the first of which was March 2006. When asked about the road map for the vacation of 3G spectrum, Mr Raja told reporters on Thursday: “We are hopeful that some spectrum for both 2G and 3G services will be vacated by year end, which would pave the way for the roll-out of 3G by the middle of next year.”
He also said that “an institutional mechanism has been put in place for the early vacation of spectrum by defence”. He added that the amount of spectrum to be released would be decided by the inter-ministerial committee chaired by the national security advisor. Later in the evening at a function Mr Raja said that 3G and WiMax spectrum will be auctioned as suggested by Trai.
Further, even if the defence services were to vacate 3G spectrum, these radio frequencies are not likely to be available uniformly across the country. According to the DoT’s estimates, the availability of radio frequency services for 3G by April 2008 will range from nil to 30 MHz across different circles. Delhi will be the only circle where 30 MHz of spectrum for 3G services is expected to be vacated by April 2008.
Rajasthan, Haryana and West Bengal circles are likely to have about 25 MHz of 3G spectrum within this period, Mumbai, Punjab, UP (west) and Himachal Pradesh will have about 20 MHz, and in the Maharashtra, Gujarat, UP (east) and Bihar circles, the defence forces will vacate about 15 MHz of 3G spectrum by April 2008, says the DoT note. In about 10 telecom circles the availability of 3G spectrum by April 2008 cannot be estimated and remains suspect, the note adds.
As reported earlier by ET, the new 3G policy, when announced, is likely to have some key differences from that of Trai’s recommendations. The changes are likely to be that each GSM operator can bid for 10 MHz of 3G spectrum against 5 MHz proposed by Trai. This will imply that the proposed base price for the auction of 3G spectrum will double to Rs 2,800 crore per player on a pan-India level compared to about Rs 1,400 crore suggested by Trai.
