It is wrong to sell out radio spectrum to private enterprises.

Issues related to selling out of Radio Spectrum to private sector.

Author: P. Abraham Paul.           papaul@hotmail.com                                   25  April 2007

For the Government, money is a limitless commodity; Wireless spectrum is not.

1. Wireless Spectrum is a limited national resource and need to be handled scrupulously and judiciously. Technology is changing fast. It is an unworkable proposition to sell fresh wireless spectrum every time there is a new technology inception.

2. Growth of Telecom in the country is more in the interest of the nation than to Industrialists. Therefore, the policies need to be people centric, not money centric. Of course, the industry should be encouraged with right support such as quickly giving out spectrum as required when it is needed on lease at subsidized rates of revenue sharing basis and keeping the ownership with government, so that the cost to end users can be kept low and spectrum can be withdrawn and reallocated where it is not being put to use.   

3. Telecom business houses are becoming behemoths and M&As are going to be the order of the future. Selling out spectrum by open auction will end up in hoarding of this national resource by few business houses. The ownership of spectrum bought in auction by many especially the new entrants, will ultimately will land in the hands of few. Even the Government will have to buy it from them at exorbitant cost for its own needs.

4. Hording of spectrum by few industrialists will have many negative impacts like blocking competition, non-availability of spectrum for new technology roll outs by fresh entrants and reaching the spectrum in the hands of companies from countries which can pose various forms of security risks to our country.    

Such situation can be avoided by allotting only the required bandwidth of spectrum to each service provider on time to time basis by leasing out or on revenue sharing basis.  It shall be on condition that the allotees cannot sell it or lease it directly to other companies and shall vacate the spectrum and surrender it back to Govt. when not used and not required by them.

5. The 3G roll out issues. 3G is not a very spectrum efficient technology and these will be replaced with advance technology systems soon. How will the new entrants / new technology service providers will get spectrum needed for these if it is already sold out? They will have to buy it from the current owners as Govt. will have no say in this!!

For the above reasons, selling out spectrum will be like opening the Pandora's box. Since the the matter has reached some final decision, we can only sincerely hope that our government will take all necessary safeguards in the matter.

1. For those who are not that technical about the spectrum the following will give some idea.

Spectrum requirements for 3 G Universal Mobile Telecom System.

(The information is from old records and might have undergone change by now.)

The spectrum requirement in the initial phase for each operator for Universal Telecom Radio Access (UTRA) in an area is:  2X15 MHz for FDD (W-CDMA) and 5MHz for TD-CDMA (TDD).

UMTS forum recommends for a maximum of 4 UMTS operators in any area. Based on this, currently, the allocated bands for terrestrial mobile services are:

70 MHz for GSM-900, 150 MHz for GSM-1800, 120 (2x60) MHz for UMTS in the paired bands and 35 MHz for UMTS in the unpaired bands.

These sum up to a total of 375 MHz reserved today for Mobile services.

By year 2010 the spectrum requirement for Mobile services is estimated to be 550 MHz.

Additional spectrum availability for UMTS is achieved by:

a. Re-framing of existing GSM bands (900 and 1800 MHz)

b. Releasing of today's used frequencies (1.9 - 2 GHz,) and in Ku band (12 GHZ to 18GHZ ) as decided country to country basis.

c. Re-framing of frequencies used for other purposes: Television, Early Generation Mobile systems, etc.

Notes:

FDD mode using W-CDMA is intended for application in public Macro and Micro Cell environments with data transfer rate up to 384 kbps in high mobility situation.

TDD mode using TD-CDMA will be deployed in public Micro and Pico cell environment and is suitable for an optimal level of very high data rates up to or above 2 Mbps and explicitly for asymmetrical traffic demand and with low mobility situation.

From the above, it may please be seen that frequency requirement for UTRAN is to be decided individually for each operator and the availability and allocation of frequency spectrum in that country.

Again, deployment of FDD and TDD by any operator depends on their requirement and applications they propose to implement. 

2. Service Providers need to tread diligently in 3G roll outs.

WCDMA based 3G is not a spectrum efficient technology. Higher the data rate, lower will be Network coverage area, increasing cost of network.

In fact, an assured data rate of 384 to 512 kbps only is required for good quality 'Real Time Video + Audio' products. Currently most of the multi-media products proposed by vendors are designed for much higher bandwidth in the mega bit  and multi-mega bit ranges, which in turn make it necessary to have wider spectrum bandwidth by every service provider; increasing the cost and putting pressure on the spectrum availability.  Mega-bit rate products;  is good business to Telecom and Hand set manufacturers and vendors; whether it is really needed and also practically workable in the field or not.

Can anyone afford to use Elephants to carry couple of bamboos? The telecom service providers are left with no choice other than to fall in the trap. In the case of inadequate spectrum availability, or higher investment cost for wider spectrum, either way it will be difficult for the service provider to bring in enough volume to sustain the 3G business.

It is also not possible for every service provider to changeover to newer technology and many will vanish. The end result will be mergers & acquisitions. This will cause much of the spectrum passing hands and get amassed by the few enterprises.  

The basic philosophy of Mobile business is that users can roam in to any mobile network. If the spectrum cost is considerably high, 3G roaming is going to be expensive.  Decision of making it mandatory for different service providers to share common spectrum by segregating Network operation from service provision which is going to be the order of future also will become more complicated.