India telecom 2.0 the TRAI Way

Nripendra Misra, Chairman, TRAI discusses the prospects for mobile broadband technologies in India, TRAI's recommendations to the Government on spectrum related issues, 3G spectrum allocations and pricing issues and the India telecom growth story with PALLAB DUTTA

India is well-placed to leapfrog certain telecom technology developments and offer better and enhanced mobile and wireless broadband services to a potentially large customer base. With time-to-market being a key variable, will network operators and carriers be able to meet the requirements of wideranging nationwide rollouts in terms of growing needs for greater bandwidth, simpler networks and overall mobility?

Nripendra Misra: India currently has 170 million telephone subscribers, which is growing rapidly - monthly subscriber additions have crossed 6 million. Additionally, the Category B and C circles are now growing faster than the Metros and Category A circles. This indicates a strong demand and growth from typically less developed areas. This also indicates that the supply side is in place - the operators have deployed their networks around the country and are now growing quickly. In the past, service providers have been successful at meeting rollout obligations, as they have in the case of 2G networks. Hence, we believe that operators are rolling out their networks, and that the growth in the mobile subscriber base, for example, is an outcome of this rollout. Further, some more spectrum for mobile services is likely to be coordinated which will allow greater bandwidth for the operators to provide the service efficiently. TRAI's recent recommendations have made allocations of 2 x 5 MHz for 3G networks and 15 MHz for BWA systems. We feel that given the current growth trends, and the increased spectrum efficiency of these networks, this amount of spectrum will allow operators to successfully deploy around the country. The need for fast rollout of new services has already been identified. In order to provide nationwide coverage / rollout, Government has already initiated a program of support from USO fund to install towers for provision of mobile services in remote and rural areas of the country. TRAI believes that if a level-playing field is maintained and competition is encouraged, operators will make their business plans to satisfy rollout requirements and address the large Indian market in a manner that is best suited to their technical and commercial choices.

What are the opportunities and challenges that you foresee in the context of mobile broadband in the Indian scenario and given the possibilities to extend telecommunications services including triple play to a burgeoning customer base?

Nripendra Misra: The broadband penetration in the country is approx 1.90 million by October, 2006. There is enormous potential for growth of broadband considering the popularity of broadband and size of our country. The penetration of telecom services in rural areas is very limited. It is a well-known fact that wireless is the cheapest and easiest way to deploy and broadband wireless technologies like WiMAX can tap this unserved market. Globally also many mobile broadband technologies are being deployed to provide better, faster and cheaper services. Broadband is a platform which can offer a variety of services, be it voice calls, be it entertainment like IPTV, be it education and can provide access to a knowledge bank. It is bound to be very popular service. Challenges associated with broadband are relaed to the cost of customer premises equipment, non-availability of the contents in local languages, and limited applications which have been launched so far. The popularity of broadband will get a setback if no actions are taken immediately to address these issues.

What have been the most significant developments that have taken place with regard to spectrum availability in certain specific bands since TRAI's recommendations to the Government on spectrum related issues in May 2005?

Nripendra Misra: Since TRAI forwarded its recommendations to the Government in May last year, significant developments have taken place in the spectrum availability position. With the initiative of the Government 2X20 MHz in 1800 MHz band and 2X25 MHz in 2.1 GHz band is expected to be made available for mobile services.

Could you share your viewpoints on 3G spectrum allocations and pricing related issues. Will 3G spectrum in 2.1 Ghz be available in about 6-9 months? What are the prospects for EV-DO-based 3G services by CDMA operators and Wideband CDMA services by GSM operators?

Nripendra Misra: TRAI has already submitted its recommendations on 'Allocation and pricing of spectrum for 3G and broadband wireless access services' to the Government on Sept. 27, 2006. In these recommendations, the identified spectrum for 3G are 800 MHz, 2.1 GHz & 450 MHz bands which can be used for EV-DO as well as WCDMA services.

Will there be a level playing field in the 23 circles in the country? As a regulator and facilitator, what else does TRAI need to do to accelerate competition thereby leading to affordable broadband services?

Nripendra Misra: There is a presence of 4-7 telecom operators in each circle in the country and the level playing field among them is being maintained. TRAI has recently submitted recommendations of Broadband Wireless Access wherein availability of spectrum up to 12 operators (UASL & ISP) at the rate of 15 MHz in the frequency band 3.3-3.4 and 3.4- 3.6 GHz has been considered. It may be mentioned that wireless is the cheapest and simplest means of communications.

What are some of the potential advantages of the 3G platform? Will its adoption rate be as fast as expected in a dynamic, emerging market such as India or will market forces determine the deployment of any particular mobile broadband technology? Will TRAI's subscriber-based spectrum allocation criteria hold good to prevent undue advantage or edge of a particular technology over others?

Nripendra Misra: 3G platform can provide data-centric applications such as video gaming, Internet, video streaming/ clippings etc. while on the move, besides cheap voice. It has huge capacity to handle voice and data. Keeping in view the worldwide trend, it can be said that initially about 5 % existing subscriber will adopt 3G and thereafter the market forces will decide the penetration of 3G. The subscriber base criteria are good for voice -centric services. For data services, the criteria need to be revisited. Further, the spectrum for 3G has been recommended for both technology (WCDMA & EVDO) and additional spectrum may not be required within a short time span.

TRAI had long realized the importance of wireless broadband technologies such as WiMAX, Wi-FI in opening up the market for deployment both in urban and especially in rural India using wireless technologies. What facilitative steps and measures would TRAI moot to enable service providers to deploy high-quality advanced wireless networks?

Nripendra Misra: TRAI in its recommendation on ‘Allocation and pricing of spectrum for 3G and broadband wireless access services’ has recommended that the term of spectrum use rights for BWA should be five years, renewable up to 20 years subject to the fulfillment of the spectrum license terms and conditions keeping in view that a one time upfront payment of entry fee for a 20 years spectrum license might be difficult for some operators and is contrary to the goal of keeping reduced cost of these services. Further, TRAI has set the spectrum price low and it has recommended incentive for those operators who complete rollout.

Could you share your viewpoints on the expected high-growth phase of the Indian telecom market with respect to wireless and broadband segments, growth in tele-density, rural market growth, cellular telephony penetration?

Nripendra Misra: India has witnessed high growth in the mobile sector. Every month, about 5-6 million mobile subscribers are getting added. India still has great potential in rural areas and operators would like to tap it using mobile and broadband technologies. The tele density in the urban areas (metros) has reached about 65 % whereas it is overall around 12 %. Rural areas have still got very low penetration and tele -density is about 2- 4%. Therefore, there is a need to encourage rural penetration to increase the tele-density of India. The broadband scenario is fast changing. PC costs have been drastically reduced. Many other user-friendly devices are coming in the market having almost similar functionalities. Service providers are offering PCs bundled with the broadband connections. Broadband tariffs have also been reduced by service providers. New applications like IPTV, gaming etc. are being launched. As such, it is expected that broadband popularity will increase and exponential growth will be witnessed in coming years.