Recently in Regulatory Category

3G and BWA Wireless spectrum auction base price announced, as usual government has exceeded all predictions, My prediction too. Do read my previous analysis on expected revenue to government Here. As usual reaction from industry is totally against high price. Government is looking at money and not affordability, some strong reaction from Industry icons.

• Pan-india 3G spectrum base price is 35 Billion INR.
• 3 nos of 20MHz spectrum total base price is 17.5 Billion
• 2 nos of 1.25MHz slot of EV-DO spectrum base price is 8.75 Billion

Stated by one of the popular Telecom journal in  India tele.net. COAI (Cellular Operators Association of India) expressed concerns about huge difference between base price of 3G spectrum adn BWA. COAI is very much concerned about WiMax operators backdoor entry in to 3G, they further explained that since WiMax and 3G can offer similar type of services and availability operators will choose WiMax and get in to 3G customer base with less spectrum cost. AUSPI (Association of Unified Telecom Service Providers of India) also expressed concerns over price difference and limiting the number of spectrum to 2 in case of CDMA. They have also criticized about government policy of increasing the competition in auction by reducing the number of participating band. On the other hand ISPAI (Internet Service Providers Association of India) expressed concerns about huge base price and further limitation in roll out obligations.

In my view government intention to gain as much as 250 Billion in revenue is met. This huge difference between competing technologies enable big muscle players to hold all possible spectrum and hence technology monopoly in Indian Telecommunication industry. Internet service providers will have huge problem in terms of keeping their present customer and gaining new customers. Mobile operators will easily meet coverage and roll out obligations by using their available passive and back bone infrastructure where as Internet service providers can not. On the other hand ISP stron hold of IP back bone will leverage more managed services business opportunity. Government should use alternate mechanisms to bridge digital divide, allowing operators to use 700MHz spectrum to meet rural coverage obligations is one such solutions.

I went to a near by prepaid card and mobile peripheral reseller few months back. Out of curiosity asked him a question about which mobile connection sells faster. He said "TATA DOCOMO is the fast mover, all 500 connection cards of his quota soled out in 2 Hrs and waiting for next dispatch, If you want a new connection book in advance with RS 100 payment." And to my question why ? his answer is 1 sec billing. TATA DOCOMO simple USP is "PER SECOND BILLING". To an end customer it saves lot of money, since so long one minute billing from other operators are charging a same amount for 1 sec as well as 59secs of call duration. Those mobile operators billing is technically wrong. Phone usage should be billed based upon ERLANGS. A unit to measure Hrs of traffic used in an hr. It is a statistical measure of offered load. With this every second will have big difference on required link capacity and hence investment. Docomo's strategy of per second billing is in either way does good thing for indian mobile communication industry. Soon all the other operators may have to follow similar frame work. TATA GSM has become number one in terms of user addition Thanks to per second billing. BSNL has started billing as per sec pulse. Recently TRAI's chairman suggested similar norms.
 

We may ask all the operators to consider per-second pulse as a mandatory tariff option along with their other tariff plans, Even there (in per-second tariff plan), they must ensure to bring out clearly all the riders and caveats" Telecom Regulatory Authority of India (TRAI) Chairman J S Sarma told reporters on the sidelines of the International Telecommunication Union conference in Geneva.

Auction of 3G spectrum and BWA is expected to complete by January 2010. Big mobile operators are well planned to kick start implementation as soon as possible. Who ever owns the spectrum, what is in it for the government? Like sea, land, and minerals WIRELESS SPECTRUM is considered to be a key national resource. Every technology can not operate in every possible spectrum, It has limitation in terms of Radio propagation, coverage, expected quality and so on. So allocating a spectrum becomes a critical activity of the government with incremental revenue generating opportunity. Since the number of operator want to participate in this telecommunication business is high, like any other opportunistic business environment, Auction process increments expected revenue.

The Government expects to get over Rs 25,000 crore from 3G spectrum allocation alone. "From the five players, we expect Rs 20,000 crore and another Rs 5,000 crore would come from bidding process. It can even be higher," From BWA auction government is expected to generate minimum of 10000 crore additional revenue.

 Even before spectrum allocation decision, Bharati airtel has announced it's participation in 3G auction. "If everything goes well on time with regard to spectrum auction, by February or March we will have spectrum allocation. By next Diwali (2010), we will have commercial launch of 3G services in India," Bharti Airtel CEO Manoj Kohli.

It would be interesting to see how far the fight for spectrum goes. More the intensity more will be the revenue to government. But considering the low price high volume indian telecommunication market. 25k crore is gettable in few years time. Looking forward to spectrum war. Once more put off will definitely bring down the interest on customers. Let see how indian Telecom market react to DATA intensive 3G (W-CDMA, and EVDO) and BWA (Mobile WiMax, LTE, WiMax advanced) technologies. 

Much awaited 3G and BWA (Broadband Wireless Access) wireless spectrum auction time lines are announced by Telecommunication ministry of India. Revised information memorandum will get released in few days from now on. It will be interesting to see, who will win the rights to operate in what spectrum. A high level GOM (Group of Ministers) team is controlling the whole process. Indian government is expecting a huge sum from telecom payers. Spectrum action will mark the beginning of an era of information exchange. Bridging the communication gap is the main agenda behind this. Both 3G and BWA aiming at increased throughput and hence more value added services (VAS). More number of internet enabled terminals, internet enabled government functions, internet enabled future rely on this auction.
Major fight is expected between big players from mobile operators like reliance, Airtel, TATA, Vodafone, and idea. It is very evident that Government is so keen to grab as much as money they can. 3G market have been a big failure in western countries largely because of the way internet penetration by means of cable and other means. Indian telecom story is entirely different from other countries. When mobile communication market kicked off in india way back late 90's, the whole world was not in a optimist look about Indian telecom market. But the present situation is so different that, late comer india is expected to by pass US very soon. Indian telecom growth story in voice market (2G) will help to achieve greater heights with 3G as well.
BWA action is the only option for many of the categoryA ISPs in India. Except Airtel, MTNL, and BSNL, All the other internet service providers have challenges in implementing the last mile internet access. Cable theft, environmental condition, too large distance to cover are some of the problems. Wirelss seems to be the only way out. New bound challenge, Mobile internet against traditional internet access is another big thread. Mobile WiMax promises to bridge the difference, but investment is huge. Available spectrum is another big challenge. ISPs are left out with 2.3GHz and 2.5GHz. Out of available 5 player options, Companies like Sify, Net4India, Tulip, TATA VSNL, Airtel, Reliance, Shyam, you telecom and etc have to fight for the 4 spots.
BSNL, and MTNL are enjoying the clear advantage as a early winners in both 3G and BWA auction. We keep hearing that nothing seems to be going well for BSNL and MTNL, there are speculations that Bharati and Reliance may catchup so easily with their implementation capability. Lets see how this 3G and BWA auction comes out.