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Krishnan Thiagarajan

We've just said the 3G game is ready to begin, but the regulator, like rain, could play spoilsport, say operators.

ARE we ready for 3G rollout in India? This has become the focal point of debate between the telecom regulator and the cellular camp.

The Chairman of the Telecom Regulatory Authority of India (TRAI), in a recent interview to a financial daily, has stated that the country is not ready for 3G yet and that this technology is not meant for a price-sensitive market like India.

The COAI (Cellular Operators Association of India), representing GSM operators, has shot off a letter to the TRAI Chairman saying these reported views do not appear justified.

At a time when several operators, including MTNL and other private operators (See Main story), are chalking out strategies for 3G services, these remarks are bound to infuse a dose of uncertainty into their plans.

While it is hard to interpret these remarks categorically, is the telecom regulator suggesting that since frequency spectrum is likely to remain scarce, it may be better for the Indian mobile industry to continue to stick to 2G (and 2.5G) rather than migrate to 3G?

If that is the inference, it goes to reinforce the point that the failure of the telecom regulator (and the Government) to spell out a clear migration path for GSM and CDMA operators from 2G to 3G services, when the unified licensing policy was first drafted in late 2003, is coming back to haunt them.

India: Ready or not

There are several reasons why 3G is relevant to India and India is ready for it. First of all, in a highly competitive arena, India cannot afford to lag behind its peers in Asia and the rest of the developed world.

Second, making the 3G option available to Indian operators is important as it opens up a commercial avenue for sustained investments in telecom infrastructure.

On a commercial basis, it is becoming clear that while voice-based revenues are steadily shrinking for operators, data services (with value-added features) offered through 3G can help replace them in the long run. Finally, unless 3G services are launched, the finer segmentation of the market, involving different schemes for different age groups, will not happen at a faster pace.

Spectrum: checks and balances

All this boils down to the efficient allocation and utilisation of frequency spectrum.

Instead of imposing curbs on the allocation of spectrum in the 1900 MHz band, it may be desirable for TRAI to delink the spectrum available for 2G (the existing technology for GSM and CDMA) from bandwidth-rich 3G services.

This will ensure that the scarce spectrum available for GSM or CDMA (in other bands) does not get unnecessarily hoarded for bandwidth-rich multimedia applications. This will also help in providing greater clarity and distinction in the allocation of spectrum between 2G/2.5G and 3G services.

Also, since the GSM subscriber base accounts for over 75 of the total mobile subscriber base, allocating the 1900 MHz band for 3G services in their favour makes greater sense.

Once competitive auctions are mandated for allocation of this spectrum, it will ensure that new operators who are keen on entering the 3G arena are in a position to compete on an equal footing with the existing operators.

Though CDMA operators stand to lose in the bargain, TRAI will have to explore other options of provisioning of spectrum in consultation with the Department of Telecommunications.

Picture by N. Balaji

maverick@thehindu.co.in

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