Cellcos hot on cool 3G

As service providers lobby aggressively for 3G the question remains whether Indian users will even use the costlier service.

By Ravi Visvesvaraya Prasad

At the World Adminis-trative Radio Confe-rence of the Interna-tional Telecomm-unications Union which was held in Ankara, the Turkish Telecom Minister grandly declared in his keynote address: “Excavations at Mount Ararat found the presence of copper pieces. This proves that even at the time of Noah’s Ark, we Turks possessed the most advanced Asymmetric Digital Subscriber Line technologies.”

The Indian Telecom Minister called up the Director General of the Archaeological Survey of India and asked him whether excavations at Dwarka found the presence of any copper pieces. “No, none whatsoever”, was the reply.

Next day, the Egyptian Telecom Minister declared in his speech: “Excavations at Tutankhamun’s Tomb found the presence of glass pieces. This proves that even in 1300 BC, we Egyptians possessed the most advanced Synchronous Optical Networks and Dense Wavelength Division Multiplexed Metropolitan Area Networks.”

The Indian Minister called up the Director General of the Archaeological Survey of India and asked him whether excavations at Indraprastha found the presence of any glass pieces. “None whatsoever”, was the reply.

The third day, the Indian Telecom Minister declared in his speech: “Excavations at Dwarka and Indraprastha found neither copper nor glass. This proves that even at the time of the Mahabharata, we Indians possessed the latest Third Generation (3G) cellular mobile networks.”

In reality, 3 G has been a long time coming to India, five years after it was introduced in UK and Italy. After several months of sparring between the Department of Telecommunications, the Telecom Regulatory Authority of India, and the two cellular lobbies – Cellular Operators Association of India representing the GSM (Global System for Mobile Communications) operators, and the Association of Unified Service Providers of India, representing the CDMA (Code Division Multiple Access) operators, the DoT announced the entry criteria for 3G in October.

After violent disagreements, the DoT finally agreed with the contention of existing cellular operators, supported by TRAI, that they should not have to apply afresh for new 3 G licences. The holders of the Unified Access Services Licences had contended that their license terms allowed them to offer “all types of access services”, and that this implied that it included 3G.

However, DoT stated that they would not be allocated 3G spectrum as a matter of right as they had demanded, on the existing revenue-sharing basis. The DoT said that thirty Megahertz of 3G spectrum would be auctioned within 90 days, in lots of five Megahertz per operator, to six operators, as had been recommended by TRAI. In contrast, Telecom Minister A. Raja had said just a few days earlier that only three 3G operators should be licensed with ten megahertz of spectrum each, a move which was bitterly opposed by TRAI. COAI, backed by opinions from legal luminaries, has contended that since the International Telecommunications Union has declared that 3G is an extension of 2G, the 3G spectrum should not be auctioned but should be allotted to existing GSM operators on a revenue-sharing basis.

Without appearing to do so, the government has also effectively stymied the heavy pressure exerted by foreign operators like AT&T and Verizon to enter the Indian market. All CDMA and GSM operators were bitterly opposed to the entry of foreign players. A cap of 5 MHz will make it impossible for a new player to provide 3G services as it will require additional start-up spectrum, but will be enough for existing GSM players to migrate some of their higher end 2G subscribers to 3G.

The key point is whether 3G can be a success in the highly price conscious Indian market. Worldwide, only 7% of mobile subscribers have migrated to 3G due to its high tariffs, comprising 200 million subscribers out of the 3.3 billion mobile subscribers.