While the MVNO consultation paper is of great importance to the mobile industry, equally important has been the consultation paper issued on 2nd May 2008 on the process of allocation and pricing for 3G and Wireless spectrum in the new bands.

It is significant as all the potential activities of operators with infrastructure ( including spectrum) will depend on how the future allocation of spectrum pans out. The TRAI has in the past recommended only limited entry for the existing operators to bid for 3G spectrum, while DOT is opposed to this move.
With the FM coming out in favor of 3G spectrum auctions including all players and not just the existing ones there is set to be some relief from what could have turned out a cozy long term cartelization of frequencies. Just as DOT does, many are reading this as a signal to prevent a major cartelization in the Wireless sector including 3G, Wireless and WiMAX.
The Telecommunications Regulatory Authority of India ( TRAI) has issued an important consultation paper on the proposed auction of spectrum in the bands which are considered as “ Prime” for mobile WiMAX. These bands are 2.3-2.4 GHz and 2.5-2.69 GHz, which have been recognized by the WiMAX Forum for its certification profiles and where wave 2 certified mobile devices are becoming available. Globally all WiMAX systems are now largely using these bands for future systems.
The TRAI consultation paper comes at quite an appropriate time as the Indian government is getting ready to allot the 3G spectrum. The consultation paper became necessary owing to certain recommendations of the TRAI on the allocation of spectrum which were self contradictory as well as at variance with global practices. The consultation paper also comes in as some of the mobile operators have started demanding that the 2.5-2.69 GHz be kept reserved for 3G-LTE after the WRC 2007 in Nov 2007 had adopted OFDMA-TDD as one of the approved air interfaces under the IMT-Advanced systems.
The paper proposes that the prime bands of 2.3-2.4 GHz and 2.5-2.69 GHz be got vacated by the scattered existing users and be earmarked for Broadband wireless ( meaning WiMAX) or 3G-Long term evolution (LTE). The Regulator has sought comments on whether the use should be technology neutral as in the United states or be specific to WiMAX or LTE. It has also sought comments on the pricing recognizing that the previous reserve prices particularly for BWA were extremely low and in most cases capped at 25% of the prices for 3G. The emergence of Mobile WiMAX worldwide as a strong technology in use in many networks has considerably increased interest in the spectrum and consequently the value which bidders are willing to pay considering that the spectrum is limited. Parts of the spectrum in the 2.5-2.69 GHz are presently in use by the Dept of Space with operating satellites and may not get vacated leaving only limited spectrum for the rest of the bidders of which one needs to be BSNL or MTNL, the state carriers. With 3G players also eying the same spectrum the number of suitors has gone up considerably for the balance left for allocation.
Unlike many countries such as Japan and Korea, India has not placed restrictions on the mobile operators also accumulating valuable wireless and WiMAX spectrum. This has led to the possibility of complete monopolization of the market by some of the existing mobile operators by having both the GSM/CDMA as well as the WiMAX spectrum which they hold in the 3.4-3.6 GHz band. This includes all the major cellular players. The operators have already wrenched a decision in their favor of keeping
foreign bidders out of the forthcoming 3G spectrum auctions despite the ministry of communications seeking to bring in additional players.
The responses and decisions on the present consultation paper will be important in determining whether the existing players will also be able to get the prime spectrum for Mobile WiMAX and LTE and keep other potential bidders which may be willing to offer much higher prices out. The TRAI, seeing a potential Frankenstein’s Monster of cartelization being created step by step in India has now put a question on the cumulative spectrum which a bidder can hold in these bands.
The decisions on this consultation paper are set to be some of the most important policy decisions which India is expected to witness in the current year considering the long term implications of these recommendations. It will also determine how open India’s market will be for foreign players who now have to play second fiddle to a local operator. It will also determine whether other players in the convergence era such as IPTV providers, broadcasters or wireless ISPs can expect to be in fray for new technologies or simply be swept by the wave of cartelization which is today the name of the game in spectrum.

India to allocate 3G and Mobile WiMAX Spectrum by June 2008

May 27,2008
The Indian telecommunications minister Mr. A Raja has gone on record ( 23rd May ) to state that the Policies and guidelines for the allocation of 3G Spectrum will be issued by June 2008.

This is quite ambitious, considering that the submission of comments to the Indian regulator TRAI on the allocation of 3G and WiMAX spectrum has closed on 23rd May 2008. The process of review and public consultation could take the best part of June 2008. Thereafter the DoT and the other agencies need to decide on the modalities of its auction.

The Indian mobile operators lobby has been traditionally very strong ( not surprising considering that they have over the quarter of the population of India as their subscribers) in wresting concessions in their favour. As expected their chorus has been to consider only existing GSM operators for such allocation. However in this instance the telecommunications minister Mr Raja has been holding his fort strongly to permit even the foreign bidders in the process.

We have always maintained that the implementation of policies which have a long term bearing on the entire nation need to implemented with considerable care. It is not easy to undo such allocations and serious distortions in quality of services and prices to customers can arise owing to faulty policies.

The TRAI has already sounded a note of caution on the question whether the mobile operators should also be allowed to accumulate the Mobille WiMAX spectrum and if so to what extent. It is well known that after the WRC 2007 , which made OFDMA-TDD ( one of the profiles of mobile WiMAX) a part of the IMT-advanced air interfaces the mobile operators have been spoiling for grabbing the mobile WiMAX Spectrum. However as things turn out in such cases, while the TRAI has recommended the grabbing of new spectrum by the existing mobile operators only, the minister Mr Rajah, true to his name, stands in the way like a King! If it spoils the party for some, so be it.