Broadbandindia Magazine

TRAI called for industry players to submit their recommendations on numerous issues such as spectrum allocation mode to be followed for 2G services, pricing of 2G spectrum, mergers & acquisitions (M&A) and licensing related issues. The regulator has floated a consultation paper on the same and asked industry players to submit their view points by November 12, 2009.

Industry views on the future roadmap for 700 MHz finds a special mention in the agenda of the consultation paper. Emphasizing on the proper use of the 700 MHz band for its better propagation characteristics and also for the fact that the band is readily available for use, the regulator has sought to know when and how the band should be allotted between the various competitive services. According to the regulator, the band can be used for Wireless broadband, Digital terrestrial television, High definition TV, Mobile television & Data broadcasting services. It further says that the band is ideally suited for rural broadband delivery due to the low-capex ecosystem offered by the band.

Even for LTE, 700 MHz would lead to 70 % cheaper proposition than LTE on a 2.1 GHz band, says the regulator. Though frequency earmarking for this band has been done in favour of national broadcaster, Doordarshan for digital transmission in four metros, the operator is yet to launch commercial services on this band. Some government agencies and PSU BSNL are operating some point to point microwave links in 610-806 MHz band. The regulator has termed the 700 MHz as the digital dividend i.e. a band which currently is sued for analogue trans- mission but can easily accommodate digital transmission which in turn will boost the efficiency use of the band. It has asked for identification of a clear roadmap on the use of this band which can also be included in the planning of 3G services.

The regulator has also asked for industry players to share their views on spectrum trading, sharing perpetuity of licences, uniform license fees, spectrum assignment, spectrum pricing, spectrum management and M&A issues.

Summary of issues on which view are sought: Spectrum requirement and availability

1. Do you agree with the subscriber base projections? If not, please provide the reasons for disagreement and your projection estimates along with their basis?

2. Do you agree with the spectrum requirement projected in 1.7 to 1.12 (points in the consultation paper)? Please give your assessment (service-area wise).

3. How can the spectrum required for Telecommunication purposes and currently available with the Government agencies be re-farmed?

4. In view of the policy of technology and service neutrality licences, should any restriction be placed on these bands (800,900 and 1800 MHz) for providing a specific service and secondly, after the expiry of present licences, how will the spectrum in the 800/900 MHz band be assigned to the operators?

5. How and when should spectrum in 700 MHz band be allocated between competitive services?

6. What is the impact of digital dividend on 3G and BWA?

Licensing issues

1. Should the spectrum be delinked from the UAS Licence? Please provide the reasons for your response.?

2. In case it is decided not to delink spectrum from UAS license, then should there be a limit on minimum and maximum number of access service providers in a service area? If yes, what should be the number of operators?

3. What should be the considerations to determine maximum spectrum per entity?

4. Is there a need to put a limit on the maximum spectrum one licensee can hold? If yes, then what should be the limit? Should operators having more than the maximum limit, if determined, be assigned any more spectrum?

5. If an existing licensee has more spectrum than the specified limit, then how should this spectrum be treated? Should such spectrum be taken back or should it be subjected to higher charging regime?

6. In the event fresh licences are to be granted, what should be the Entry fee for the license?

7. In case it is decided that the spectrum is to be delinked from the license then what should be the entry fee for such a Licence and should there be any roll out condition?

8. Is there a need to do spectrum audit? If it is found in the audit that an operator is not using the spectrum efficiently what is the suggested course of action? Can penalties be imposed?

9. Can spectrum be assigned based on metro, urban and rural areas separately? If yes, what issues do you foresee in this method?

10. Since the amount of spectrum and the investment required for its utilisation in metro and large cities is higher than in rural areas, can asymmetric pricing of telecom services be a feasible proposition?

M&A issues

1. Whether the existing licence conditions and guidelines related to M&A restrict consolidation in the telecom sector? If yes, what should be the alternative framework for M&A in the telecom sector?

2. Whether lock-in clause in UASL agreement is a barrier to consolidation in telecom sector? If yes, what modifications may be considered in the clause to facilitate consolidation?

3. Whether market share in terms of subscriber base/AGR should continue to regulate M&A activity in addition to the restriction on spectrum holding?

4. Whether there should be a transfer charge on spectrum upon merger and acquisition? If yes, whether such charges should be same in case of  M&A/transfer/sharing of spectrum?

5. Whether the transfer charges should be one-time only for first such M&A or should they be levied each time an M&A takes place?

6. Whether transfer charges should be levied on the lesser or higher of the 2G spectrum holdings of the merging entities?

7. Whether the spectrum held consequent upon M&A be subjected to a maximum limit?

Spectrum Trading

1. Is spectrum trading required to encourage spectrum consolidation and improve spectrum utilization efficiency?

2. Who all should be permitted to trade the spectrum ?

3. Should the original allottee who has failed to fulfill “Roll out obligations” be allowed to do spectrum trading?

4. Should transfer charges be levied in case of spectrum trading?

5. What should be the parameters and methodology to determine first time spectrum transfer charges payable to Government for trading of the spectrum? How should these charges be determined year after year?

6. Should such capping be limited to 2G spectrum only or consider other bands of spectrum also? Give your suggestions with justification.

7. Should size of minimum tradable block of spectrum be defined or left to the market forces?

8. Should the cost of spectrum trading be more than the spectrum assignment cost?

Spectrum sharing

1. Should Spectrum sharing be allowed? If yes, what should be the regulatory framework for allowing spectrum sharing among the service providers?

2. What should be criteria to permit spectrum sharing?

3. should spectrum sharing charges be regulated? If yes then what parameters should be considered to derive spectrum sharing charges? Should such charges be prescribed per MHz or for total allocated spectrum to the entity in LSA?

4. Should there be any preconditions that rollout obligation be fulfilled by one or both service provider before allowing the sharing of spectrum?

5. In case of spectrum sharing, who will have the rollout obligations? Giver or receiver?

6. Should there be a time limit on licence or should it be perpetual?

7. What should be the validity period of assigned spectrum in case it is delinked from the licence? 20 years, as it exists, or any other period

8. What should be the validity period of spectrum if spectrum is allocated for a different technology under the same license midway during the life of the license?

9. If the spectrum assignment is for a defined period, then for what period and at what price should the extension of assigned spectrum be done?

10. If the spectrum assignment is for a defined period, then after the expiry of the period should the same holder/licensee be given the first priority?

Uniform License Fee

1. What are the advantages and disadvantages of a uniform license fee?

2. Whether there should be a uniform License Fee across all telecom licenses and service areas including services covered under registrations?

3. If introduced, what should be the rate of uniform License Fee?

Spectrum assignment

1. If the initial spectrum is de-linked from the licence, then what should be the method for subsequent assignment?

2. If the initial spectrum continues to be linked with licence then is there any need to change from SLC based assignment?

3. In case a two-tier mechanism is adopted, then what should be the alternate method and the threshold beyond which it will be implemented?

4. Should the spectrum be assigned in tranches of 1 MHz for GSM technology? What is the optimum tranche for assignment?

5. In case a market based mechanism (i.e. auction) is decided to be adopted, would there be the issue of level playing field amongst licensees who have different amount of spectrum holding? How should this be addressed?

6. In case continuation of SLC criteria is considered appropriate then, what should be the subscriber numbers for assignment of additional spectrum?

7. In your opinion, what should be the method of assigning spectrum in bands other than 800, 900 and 1800 MHz for use other than commercial?

Spectrum pricing

1. Should the service providers having spectrum above the committed threshold be charged a one time charge for the additional spectrum?

2. In case it is decided to levy one time charge beyond a certain amount then what in your opinion should be the date from which the charge should be calculated and why?

3. On what basis, this upfront charge be decided? Should it be benchmarked to the auction price of 3G spectrum or some other benchmark?

4. Should the annual spectrum charges be uniform irrespective of quantum of spectrum and technology?

5. Should there be regular review of spectrum charges? If so, at what interval and what should be the methodology?

Structure for spectrum management

1. What in your opinion is the desired structure for efficient management of spectrum.