New vs Old National Telecom Policy 2011-12 Comparison – Govt Wrong on Spectrum Sharing

India’s Minister for Communications & IT has announced incremental roadmap for the National Telecom Policy 2011-12. Here is a Side by Side comparison of what existed and what is proposed in the new policy.

• Unified Service Access License – [Current] Bundled with spectrum   [Proposed] Licence and spectrum delinked, spectrum to be
  spectrum to be acquired
• Licence fee – [Current] Paying 6-10% based on service area. [ Proposed] Uniform licence fee at 8% phased over next two years
• License Renewals – [Current] Current licence tenure is 20 years  [Proposed] To be extended for 10 yrs at a time.  License fee at time of extension; Rs 20m for Metros and ‘A’ circle; Rs 10m for ‘B’ circle; Rs 5m for ‘C’ circle
• Spectrum Holding Limits – [Current] None   [Proposed] GSM: 10 MHz in Delhi and Mumbai; 8MHz in rest of the circles; 25% of total spectrum for M&A/ auction
• Spectrum Sharing – [Current] None   [Proposed] Spectrum sharing now permitted on 2G but not on 3G. Permitted for 5 years in those circles where both the operators have 2G spectrum but cannot exceed the cap of 25%.
• Spectrum Re-farming – [Current] None   [Proposed] Spectrum in 900 MHz band accepted in principle; to examine further on TRAI recommendations
• Telecom M&A – [Current] None   [Proposed] Allowed automatically upto 35% resultant revenue market share; “need for beyond 35% up to 60% noted” but will await details from TRAI

The Policy has given clarity or atleast direction on where the sector is heading though it is not very clear on Spectrum Pricing and Refarming is not going to be an easy task.

Finally, one should note that the Honorable Minister of Communications and IT is not at all a subject expert and anyone who has progressive Telecom reforms on mind will strongly object to his Negative policy measure on 3G Spectrum sharing. Globally, Telecos have been witnessing huge demand to carry Data Packets than Plain Old Voice Traffic. So in the context of converging technologies, it really doesn’t make any sense for the Government to dictate the use of spectrum bands for only this or that. Government should look forward to maximize revenue by auctioning the spectrum and leave the rest for Telecom Engineers to deploy Spectrum and use it efficiently to provide services ir-respective of Technologies 2G / 2.5 G EDGE or 3G Data only then we will hit the 600 Mn broadband Subscribers target by 2020.