Airwave conundrum

The Telecom Commission’s decision to allow Internet Service Providers (ISP) holding broadband spectrum to offer voice services as well, by paying a one-time entry fee of Rs 1,658 crore, is indefensible, as it goes against all accepted principles of public tendering. When spectrum of 2300 MHz frequency was put up for auction in 2010, the Government had stated upfront that the operator had the freedom to choose the nature of service it would offer on these airwaves. But once exercised and the appropriate fee paid on it, the tender process stands completed. Thus, winners of the auction were at that time given the option to take a Unified Access Service (UAS) licence by paying Rs 1,658 crore or, alternatively, a plain ISP licence for Rs 30 lakh. If none of them chose to take the UAS license at that time, which would have enabled them to offer any kind of voice or data services, it showed they were happy with just an ISP licence. The knowledge that an ISP licence would not allow them to offer voice services, likewise, discouraged other operators to bid aggressively then. Moreover, the Government itself had fixed the reserve price for these airwaves at less than half of that for 3G spectrum in the 2100 MHz band: The justification was that 4G was meant for improving broadband penetration among the masses, whereas the latter was only for delivering voice/data services for smartphone-using premium consumers.

For the Government to now permit broadband players the option to migrate to a unified licensing regime by paying the same Rs 1,658 crore entry fees, is flawed on two counts. First, it seeks to keep alive a tendering process that has ceased to exist. Two, it assigns a entry fee value determined as far back as in 2003 for the purposes of allowing fixed line telecom operators to offer full mobile services telephony, which has no relevance to the present situation. There is no harm if ISPs are enabled to offer voice services, provided they surrender their existing spectrum, which can further be auctioned without any technology or usage strings attached. This will also facilitate better price discovery for the airwaves on offer.

Airwaves, whether of 2300 MHz frequency or any other, should not tie the licensee down to a particular service (data/voice etc.) or technology platform (CDMA/GSM/high speed broadband, and so on). The time has, therefore, come for moving towards removing all restrictions on usage of spectrum: 900 and 1800 MHz bands only for GSM technology, 800 MHz for CDMA, 2100 MHz for 3G data/voice, 2300 MHz for 4G broadband, and so on. Operators should have the freedom to offer any type of voice or data services, irrespective of the technology used, on the spectrum that they have.

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