3G Guidelines Coming Soon ?

There are reports that the Department of Telecommunications (DoT) will set out the 3G policy for India later this week. The Minister for Communications and IT, Mr. A. Raja is expected to make an announcement on Friday, August 1, 2008. Such speculation is not new and many such false dawns have occurred before. However, given that the UPA governmet survived the trust vote recently, it must surely be feeling emboldened to push through some long-pending policy initiatives before the next general election. More on this at GigaOm.

TRAI Recommendations on BWA Spectrum

The Indian telecom regulator, TRAI launched a consultation paper in May 2008 on allocation and pricing of spectrum in 2.3-2.4 GHz, 2.5-2.69 GHz and
3.3-3.6 GHz bands which have been earmarked for BWA services. TRAI finally released its recommendations to the Department of Telecom (DoT).

On the question of eligibility, TRAI recommended that UASL, CMSPs and Category A and B ISPs should be allowed for bid for spectrum in these bands.

The DoT was advised to convert the existing city-specific licenses for spectrum in 3.3-3.4 GHz to circle-wide licenses (as used for mobile networks). TRAI also suggested that licensees with spectrum in both 2.5 and 3.3-3.4 GHz bands should move to 3.3-3.4 GHz and the remaining spectrum in this band should be auctioned in 2x7 MHz blocks only to those who don’t already own spectrum in this band or existing licensees with less than 2x7 MHz holdings (provided they vacate existing spectrum if they win). On the contentious question of choice between TDD and FDD, although TRAI favored the former option but it decided to leave the choice to the operators.

For the 2.3-2.4 GHz and 2.5-2.69 GHz bands, TRAI recommended that spectrum should be auctioned in 5 MHz blocks with a maximum of 15 MHz per service provider (combined total of allocations in both bands). In addition, the TDD mode was favored for allocations in the 2.3-2.4 GHz band. The DoT was advised to get additional spectrum in 2.5-2.69 GHz vacated within pre-defined time duration in coordination with the Dept of Space. In case, additional spectrum (in addition to the currently available 40 MHz) becomes free, then DoT may decide to allow both TDD and FDD modes as per the internationally accepted band plan, otherwise, the spectrum may be given for TDD in 5 MHz blocks.

On the issue of pricing, TRAI recommended that the reserve price and bank guarantees should be the same for all the three bands (RP for 15 MHz should be 60, 30 and 10 Crore Rupees for Metro & Category A, Category B and Category C circles, respectively). Service providers already having spectrum in 3.3-3.4 GHz band should be asked to pay the same price as new licensees. In addition, annual spectrum fee of 1% of AGR should be charged from all BWA service providers.

TRAI recommended that a simultaneous ascending e-auction should be organised for 5 MHz blocks such that each bidder can go for 1, 2 or 3 blocks (needs to be specified beforehand). It was suggested that successful bidders can choose to have contiguous blocks by paying a 25% premium on the highest bid value for each contiguous 5 MHz block.

This is, by no means, the end of the debate on how to allocate and price BWA spectrum. Immediately prior to the release of TRAI's recommendations, the DoT wrote to TRAI that spectrum should be allocated in 10 MHz blocks. However, TRAI decided to publish its recommendation for 5 MHz block size. It must be noted, though, that TRAI's others recommendations more or less matched DoT's thoughts.