At the GSMA press meet held on Tuesday here in New Delhi, it seemed like the industry body had discovered India only yesterday. The Indian telecom market has been growing at very impressive rates for over a decade now. Why then did GSMA feel the need to open an office in New Delhi only in 2012?
"That's a very good question," Anne Bouverot, GSMA's director-general, said when this reporter put forth that question to the panel of speakers that included Tom Phillips, GSMA's chief government and regulatory affairs officer; Sanjay Kapoor, chairman of COAI and CEO of Bharti Group and board member on GSMA; and Sandeep Karanwal, GSMA's spectrum policy director for India.
Bouverot did not have a convincing answer. "I took over only six months back, so I really don't know," she said. Kapoor added that the Indian industry has been working with the GSMA for quite some time. It's only that they never had an office in India.
GSM operators in India already have an association--the Cellular Operators' Association of India (COAI)--which represents their interests and participates in the regulatory process for them in India.
Well, even if they didn't say it, the answer was really quite obvious. It's something that I have seen kids do all the time--get your big brother to fight your battle. And big brothers rarely turn the request down.
The primary objective of the GSMA, according to Bouverot, is to bring a global perspective to the Indian telecom market. But the handouts given by the GSMA had its submissions to the telecom regulator, TRAI, on the spectrum issue. So what really is the big issue that's bothering GSM operators in India?
It all began on Feb. 2 this year when the Supreme Court of India revoked all 122 telecom licenses allotted under the 2G spectrum on or after Jan. 10, 2008. All additional spectrum given to incumbents on or after Jan. 10, 2008, were also been revoked.
The licenses, which were allotted by former telecom minister A. Raja, will be cancelled by Jun. 2 and the TRAI must go in for a fresh issue of licenses during this period, the apex court observed.
On Mar. 7, TRAI issued a consultation paper on "Auction of Spectrum". In this paper, TRAI had sought industry views on a host of topics like the amount of spectrum to be auctioned, liberalization and refarming of spectrum in 800/900 MHz bands, structure of auction, and eligibility criteria for participation. The other issues included were spectrum block size, reserve price, rollout obligations, spectrum usage charges and trading.
According to the consultation paper, 60MHz and 413.6MHz of spectrum will be vacated in 800MHz and 1800MHz spectrum bands, respectively, from the cancellation of 122 2G licenses. TRAI also put forth various models that can be used for auction.
As expected, the TRAI consultation paper drew divergent views from the industry. For instance, Reliance Industries-owned Infotel Broadband Service in response to Trai's consultation paper has asked the regulator to float a separate consultation paper for auction of 700MHz spectrum band, taking in to consideration the technology developments. Infotel Broadband won the pan-India BWA/4G license in 2010.
"Auction of spectrum in 1800MHz band for 2G services should be framed up first and foremost... We have proposed separate consultation should be held for these (700/800/900 MHz) bands," Infotel Broadband Service (IBSL) said in response to Trai's consultation paper.
Reliance Communications (RCom) pointed out that nowhere in the world have 4G services reached a level of affordability and suggested that it is not the right time to auction 700MHz band. "Any action contemplated for 700MHz should be deferred till global market matures with available devices and infrastructure in 2015," RCom said.
However, telecom operators such as Bharti Airtel and Vodafone prefer an early auction of the 700 MHz band, preferably with proposed 2G auction.
In India, 2G services are being provided through 800, 900 and 1800MHz frequency band. Trai has proposed shifting existing telecom players providing service in 800 and 900MHz to some other frequency band after expiry of their telecom license.
The 700Mhz frequency band is considered to be one of the most valuable slots for telecom services as most of the latest technology can be transmitted in this band. According to the TRAI chairman J.S. Sarma, the regulator is likely to come up with recommendation on spectrum auction before Apr. 15. The recommendation is expected to give guidance on key issues like base price of spectrum, amount of spectrum that should be allocated to a bidder and eligible participants, among others.
According to a news report, telecom tariffs could rise by at least 30 percent if the government fails to conduct auctions for 2G telephony spectrum by Jun. 2, when the licenses of operators which got licenses in 2008 will be cancelled, following the apex court verdict. In a petition filed before the Supreme Court, the government has said that it will take 400 days to complete the auction.
If one goes by the government's petition, the new operators will have to shut operations for nearly one year. By this time, their existing subscribers will have no option but to switch to other operators.
Besides the spectrum issue, the telecom industry in India will also be impacted by the New Telecom Policy (NTP), which is likely to be out by mid-2012.
The NTP envisages doing away with national roaming, besides allowing mobile number portability (MNP) across circles. It also aims at simplifying and rationalizing the licensing regime and putting in place a transparent system for the allocation of spectrum or radio waves, and enabling their efficient usage.
So with such drastic regulatory changes and crucial spectrum auctions on the anvil, it makes sense for the big brother to be around for the GSM lobby in India. I just wish Bouverot was bold enough to admit that.