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Tatas call on TRAI for creation of spectrum custodian [The Economic Times, India](Economic Times (India) Via Acquire Media NewsEdge) Jan. 2--NEW DELHI -- The Tatas have proposed the creation of a wireless spectrum pool, managed by an independent entity, as a panacea for the intractable problems over the allocation of the scarce resource for mobile phone services. Tata Teleservices, which operates the Indicom CDMA-based mobile network and the Tata DoCoMo GSM service, has suggested to telecom regulator TRAI that independently-managed pooled spectrum will reduce costs for phone firms and allow the most efficient use of the resource. It wants to ensure the independence of the so-called Mobile Network Authority (MNA) by limiting the shareholding of the coalition of mobile phone operators in the entity to 49 percent and capping the ownership of individual cellphone companies at 15 percent. Furthermore, it seeks to distribute the ownership of 51 percent among corporate bodies, foreign investors and the public with a caveat that these independent stakeholders should not have more than 1 percent equity participation in any mobile operator. But rival phone firms, that were among the first to start providing cellular services, were unimpressed. They said the proposal tries to artificially impose a level playing field by undercutting their first-mover advantage. "Ensuring an absolute level-playing field between licensees who entered the market at different points in time is not the responsibility of the government or the regulator. Early entry comes with a set of advantages which have to be respected," an executive at a large mobile phone company said. The regulatory head of another top phone firm said the business model of telcos had evolved with spectrum as the basis and to dismantle it now is not possible. "It is not possible to trust an external agency to be responsible for your business," he said. Currently, all mobile services, except select offerings by state-run BSNL and MTNL, are provided using 2G spectrum. So far, this spectrum was awarded to telcos based on their subscriber numbers and this system has resulted in allegations that some telcos were inflating subscriber numbers to corner more of the scare airwaves. Operators have also differed on the minimum number of customers required for additional spectrum and have fought numerous court battles with the government on the issue. Moreover, phone firms are involved in a bitter fight over the quantity of airwaves that can be legally held by each operator. While GSM operators, such as Bharti Airtel, Vodafone Essar, BSNL and Idea Cellular, point out that existing regulations entitle them up to 15 MHz of airwaves per circle, those such as Reliance Communication and Tata Tele, that offer services on both GSM and CDMA platforms, claim that current licences cap the holding of airwaves at 6.2 Mhz/circle. Amid the disputes, no 2G airwaves have been allotted for the past nine months and TRAI is mulling a solution. Leading operators such as Bharti Airtel and Vodafone Essar want all future allocations to be through auctions, as recommended by a government-appointed panel. Tata Teleservices is saying that the solution it is now proposing -- having the MNA as a common transmission system that will interconnect with the networks of all service providers in a nondiscriminatory manner -- has the potential to help solve the disputes. Tata Tele has pointed out that since there are a large number of operators in every circle, it will not be feasible to allocate adequate airwaves to each mobile operator. And reducing the number of operators, it says, is not a solution since it will reduce competition. Furthermore, it argued that currently a large chunk of the spectrum is being wasted as each operator requires start-up frequencies as well as guard frequencies to ensure there is no interference between networks. "The concept of introducing a single radio frequency (RF) network based on the maximum available spectrum and controlled by an independent body will address this problem of scarce spectrum. It will provision the RF network in such a way that complete spectrum is available to operators as on required basis. This will resolve all the contentious issues related with spectrum and provide an efficient RF network to all existing as well as future service providers. This concept will drastically reduce the capital expenditure and operating expenditure of individual operators and result in the most efficient use of available spectrum," it wrote. Traffic generated by all operators will be billed at a rate negotiated between the telco and the MNA for each circle subject to TRAI guidelines. The MNA will then pay a portion of its revenues as spectrum charges and operators will no longer have to pay this levy, it added. Currently, all telcos pay 2-6 percent of their annual revenues as spectrum usage charges. To see more of The Economic Times, or to subscribe to the newspaper, go to http://economictimes.indiatimes.com Copyright (c) 2010, The Economic Times, India Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |