The announcement of the spectrum allocation policy by the department of telecommunications (dot) has spurred a letter writing campaign. Giant cellular service providers like Tata Indicom and Cellular Operator Association of India (coai) have shot off angry letters to the prime minister, petulant about the policy favouring their competitors. The ensuing squabble between Code Division Multiple Access (cdma) and the Global System for Mobile Communication (gsm) operators has brought into focus the importance of limited resource of spectrum -- calls and data transmitted over airwaves. And the service providers are ready to fight tooth and nail over the bandwidth being vacated by the defence ministry.
The new dot policy, which came into effect on March 31, has allocated a maximum of 15 mhz to gsm operators, such as Airtel and Hutch, and 7.5 mhz to cdma players, such as Reliance Infocomm and Tata Teleservices. Earlier, the maximum limits were 8 mhz for gsm and 5 mhz for cdma. Official estimates say Delhi will require an additional 28 mhz to sustain current telecom growth. Though the policy recommends a 2:1 ratio allocation to gsm and cdma operators, it withdrew the existing condition that cdma operators were to add more users than gsm operators if they wanted extra spectrum. The new policy mandates equal subscriber base for more bandwidth.
Ratan Tata, the chairman of Tata group, in his letter to the prime minister has brought up the issue of 'self-proclaimed subscriber base'. He is opposed to the policy of distributing spectrum on a subscriber-number basis without a proper verification mechanism. At present, Bharti Enterprises leads the gsm group with 18.5 million subscribers and Reliance heads the cdma group with 14.6 million users.
The policy has angered the cdma operators on other counts as well. dot has ordered 2:1 ratio spectrum distribution on the premise that cdma technology is more spectrum-efficient. But the operators claim that they are receiving the short end of the stick because of better technology. According to cdma lobbyists, this is against fair trade practices and the government's commitment to technology-neutral services.
Each group interprets 'fair play' differently. While the cdma group wants equitable distribution, the gsm lobby claims a 5:1 ratio would be fairer as the spectral characteristic of cdma technology affords it five times more capacity. In view of the arguments, cdma operators' plea of unfairness in allocation is tenuous. Their demand for more bandwidth in spite of owning more efficient technology is contradictory in itself. The availability of spectrum to each operator will decide the company's future growth and ability to hold back competition from other players.
Spectrum availability has been a global problem with disputes over spectrum occupation. Defence establishments were often granted bulk spectrum in the absence of commercial demand. Now, with escalating commercial demand for more frequencies, the war over spectrum allocation is inevitable.
In view of the increasing pressure for more space from the telecom operators, the prime miister constituted a high-powered group of ministers (gom), headed by defence minister, Pranab Mukherjee, to draft a new policy and vacate spectrum space alloted to the ministry of defence. However, dot drafted its own policy in the absence of gom recommendations.
With the formation of the gom, both cdma and gsm groups lobbied fiercely for a bigger chunk of 45 mhz of spectrum being vacated by the ministry of defence. With every move to free more bands for the telecom sector, such battles will become more frequent.
The Centre recently announced that it would spend Rs 1,000 crore in opening up more bandwidth for the telecom industry. More state-owned spectrum facilities will be vacated soon. The industry accuses the defence sector of wastefully underutilising the large number of frequencies allotted to it. The defence ministry claims that most of the equipment in use was procured overseas and vacating frequencies will mean added costs. They have demanded payment from the government or the industry for the re-tuning of equipment. Sources in the industry say the Tatas are willing to pay but not Reliance.
The Indian cellelur telephony sector has recorded a qrowth of 20-25 per cent and 100 million subscribers. With such an enormous growth, the controversy over spectrum allocation needs to be addressed sooner than later as the global telecom industry moves to the next generation of technology -- 3 g, or third generation, of which, visual wireless telephony comes as a starter.
We are a voice to you; you have been a support to us. Together we build journalism that is independent, credible and fearless. You can further help us by making a donation. This will mean a lot for our ability to bring you news, perspectives and analysis from the ground so that we can make change together.