TRAI proposes cut in spectrum charges No entry fee for 3G services for existing operators

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Our Bureau

New Delhi, May 13

THE Telecom Regulatory Authority of India has recommended that existing operators should be given spectrum to offer third generation (3G) services without any additional entry fee. The telecom regulator has also suggested bringing down the annual spectrum fee from a maximum of 6 per cent of the operator's revenues to 4 per cent a year, which may bring down the mobile tariffs further.

Announcing its recommendations for spectrum policy, the TRAI said, "Spectrum policy recommendations are based on the Government's target of 200 million mobile phones by 2007, adequate spectrum to operators to permit longer term spectrally efficient planning, reduced input costs for telecom services so as to increase coverage in semi-urban and rural areas and ensuring roll-out of 3G services."

While the regulator has drawn the attention of the Government to release additional radio frequency on an urgent basis, it has also imposed roll-out obligations on operators to prevent hoarding spectrum.

TRAI has suggested that operators must roll out 3G services, where users will be able to surf the Internet or watch movies on handsets at speeds greater than 256 kbps, to 10 per cent of each of the district headquarters in a year. The Government could cancel the allocated frequency if services are not rolled out within two years.

TRAI has recommended a minimum of 5 Mhz radio frequency for 3G services apart from additional spectrum in the 1800 Mhz, 900 Mhz and 800 Mhz bands for both the GSM and CDMA-based operators. TRAI has also suggested opening up the 450-Mhz band for the first time for use in semi-urban and rural areas. Additional spectrum would mean better quality of service for consumers.

To maintain the level playing field, new players will have to pay a one-time entry fee for getting 3G spectrum, which will be the same as those being paid by mobile operators under the unified licence regime. TRAI has recommended setting up a Group of Ministers to monitor the allocation of spectrum.

On the controversial 1,900-Mhz band, TRAI has said that the frequency could not be released since it was being used by defence agencies. The regulator has instead proposed to open up the International Mobile Telecommunications (IMT) 2,000 Mhz frequency band.

The industry is divided on this issue with the GSM operators supporting the opening of the 2,000 Mhz band for 3G services, while the CDMA operators like Reliance Infocomm wanting capacity in the 1,900 Mhz band. TRAI said it was convinced that CDMA equipment that work in the IMT 2,000 band was available, while suitable handset could be developed in six months by the vendors.

(This article was published in the Business Line print edition dated May 14, 2005)
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