The Hindu Business Line : Four important factors in spectrum allocation

Spectrum issue is hot. Different battles are simultaneously on, be they between the public and the private sector telecom companies, or CDMA (code division multiple access) and GSM (global system for mobile communications) , pitching for ‘level-playing’. A committee set up to suggest norms for spectrum allocation is to meet on November 26 and 30.

“There are at least four factors that have a significant impact with regard to spectrum allocation,” says Ms Sairee Chahal, founder of the New Delhi-based SAITA Consulting. “Infrastructure priority, trickle-down effect of telecom, regulatory transparency, and eye on the future,” she lists, during the course of an e-mail interaction with Business Line.

Excerpts from the interview.

On infrastructure priority

Telecom is an infrastructure sector and spectrum allocation needs to be addressed as a priority. The growth of telecom infrastructure will depend on the availability of spectrum.

There has been discussion regarding freeing up the defence-use spectrum for private telecom usage.

However, the issue is not so much about the freeing up the existing spectrum but that of creating a sustainable and open eco-system of telecom infrastructure. Commitment to that will automatically lead to deployment of research and policy bandwidth to solve the problem.

You have mentioned trickle-down effect. A critical argument?

Yes. The trickle-down effect of telecom in India is beyond measure. This is one revolution that has swept the nation in equal measure and granted many under-represented, under-privileged and under-served sections of the society a way to access economic and social independence. Curtailing the growth of telecom infrastructure will adversely impact the reach and response quotient of the masses of India.

Is there a rationale for regulatory transparency?

Definitely. Regulatory transparency influences the creation of a level-playing field. Also, it conveys the dynamics of the political-economic environment.

Lack of regulatory transparency slows down decision-making and curtails enterprise and technological innovation. Spectrum allocation in India has come under the same fire, and this may lead to a slowdown in the sector.

So, what should be done?

All stakeholders in the telecom space need to be consulted, and their perspectives weighed adequately before a decision is arrived at with regard to the spectrum allocation. While the regulatory and industry bodies are working at it, greater attention needs to be paid to bring public-private decision makers together.

Eye on the future - meaning, technologies?

That’s right. Most developed telecom markets use 3G and 4G technologies, whereas India is stuck with congested 2.5G networks.

Advanced application of telecom and digital technologies ride on the back of robust infrastructure.

The entire telecom eco-system depends on the spectrum pipeline. These stakeholders are – telecom operators, mobile value-added service companies, digital companies, equipment manufacturers, ancillaries, vendors and ultimately users.

Does India have unique problems as regards telecom?

I feel so. India is a unique market, more so in telecom. For, a country that was struggling with basic connectivity a decade ago is now at the helm of wireless connectivity revolution.

The leapfrog gamble has paid of and how. The total number of wireless subscribers (GSM and CDMA) has crossed 200 million, as per recent data.

Telecom has been one of the vehicles of progress of the Indian economy and growth in the sector is imperative in order to match economic and social growth aspirations of India.

What have been the important drivers to telecom growth?

In my view, the growth in the telecom markets has come owing to two important factors, viz. price elasticity of demand, and policy interventions.

In sum, therefore…

The mechanism for telecom regulation and defaults seem adequate; however, institutional support, and political will for implementing them are not. So far, the focus has been on attracting investments. The need of the hour is, therefore, to optimise spectrum usage for greater economic benefits.

Prior to setting up SAITA Consulting, Ms Chahal was a consultant with Heidrick & Struggles, where she was instrumental in setting up the firm’s Russia practice. A doctoral studies candidate at the School of International Studies, Jawaharlal Nehru University (JNU), she is a PGDBM from IMT, Ghaziabad. Ms Chahal’s academic research focuses on corporate governance-privatisation in emerging markets and India-Russia economic relations.

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Four important factors in spectrum allocation