The Hindu Business Line : Spectre of competition - sacrifice at the spectrum altar?

Any decision on spectrum should not sacrifice the long-term interest in favour of the immediate benefits, says Mr Bivek Anand, Associate Director, KPMG Advisory Services.

Talking to Business Line about the ramifications of the currently strumming spectrum debate in the telecom space, Mr Anand insists that the regulator must guard against diluting the index of competition in the industry, in the long run, by acting in the interest of short-term benefit to the consumer.

“After all, a sustained and healthy competition among the various players is the key to enduring benefits to the consumer,” he adds, in the course of a subsequent e-mail interaction.

“Any decision, which leads to a significantly higher competitiveness of any one player, while resulting in immediate benefits to consumers (in terms of more services, higher QoS or quality of service, lower tariff), will be detrimental to the industry’s competitiveness in the long run.”

Excerpts from the interview.

Why the spectrum debate?

Because there are inherent complexities in attempting a just and equitable allocation of spectrum, be it for military services, mobile services, or any other wireless services.

The complexities multiply manifold while developing the principles for allocation to existing and prospective mobile services providers.

How does it impact competition?

Spectrum being ‘the’ natural resource required for offering services, its advantageous allocation could yield substantial ‘capacity-linked’ competitive advantages.

This explains why the industry bodies are not leaving any stone unturned to obtain a ‘better’ allocation vis-À-vis competition.

The quarrel as nothing to do with technology, right?

No, the largest complications arise at the technology level. Both CDMA (code division multiple access) and GSM (global system for mobile communications) technologies have been articulating why their network deserves a higher allocation of equivalent spectrum.

While everyone realises that CDMA network can make do with lesser spectrum to carry the same number of subscribers as GSM network, how much this should translate into in terms of the differential in absolute spectrum allocation between the two technologies, is a matter of much debate.

Are there other problems too?

At the next level, how the spectrum is further allocated amongst the players, too, has a number of competing schools of thought.

There can be a plenty of debate whether it should be an auction method (and if yes, then should it be the simultaneous ascending price method or the sealed bid method or any other - there are several such mechanisms each having its own benefits and pitfalls) or whether it should be based on spectrum utilisation method.

Who would have the final say?

The role of the regulator becomes very crucial in such a scenario. Any method that the regulator specifies should weigh the impact on the longer-term interests of the consumer.

Some of the methods could appear to favour the consumer, but the regulator must guard against whether the same necessarily translate into the longer-term benefits.

Is mobile number portability (MNP) an unrelated issue?

Allied, I’d say. Because spectrum allocation becomes all the more important in the context of the impending number portability scenario, where subscribers could immediately switch over to another service provider, thus weakening the service providers who get a sub-optimal allocation of the spectrum.

This will hit one of the foundational pillars of the spectacular and a reasonably balanced growth of telecommunications in the country - the subscribers have benefited so far since the competing networks and service providers have been able to develop capabilities in a fiercely competitive market place.

The shape of things to come, as you see it?

A tough ask, but the government and the regulator have in the past demonstrated the market acumen, which has enabled the telecom growth in the country. http://InterviewsInsights.blogspot.com

More Stories on : Telecommunications | Interview

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page