Speed up 4G service rollout, DoT tells broadband players

The Department of Telecom has asked companies that bagged broadband spectrum in the 2010 auctions to start offering services at the earliest. Six companies had won spectrum for offering fourth generation (4G) services but only one has started operations partially even after two years.

The DoT is worried that the delay in rolling out 4G services could lead to revenue loss for the Government.

The Department has swung into action in the backdrop of recent allegations in the coal allocation scam that the Government did not take any action though private players were sitting on mine blocks for years without producing any thing.

In the case of broadband spectrum, the operators have been given a five-year time frame to complete their rollout obligations.

The operators have to offer coverage in at least 90 per cent of each district in a circle by 2015. Therefore, legally, the Government cannot force players to start services before the five-year period ends.

But the worry is that none of the operators, barring Airtel, has even applied for the Wireless Operating Licence. This licence is required for the operators to start using the spectrum allocated to them post the auction.

From the Government point of view, operators are required to pay one per cent of revenues as spectrum usage charge, after one year of taking the licence. The DoT officials are concerned that the delay in taking this licence could result in revenue loss to the exchequer.

“We have written to the operators for early deployment of network for broadband services and to intimate the Telecom Ministry about the technology to be used by them,” said a senior DoT official.

In 2010, six operators had won broadband spectrum — Infotel Broadband, now owned by Reliance Industries; Bharti Airtel, Aircel, Qualcomm, Tikona Digital and Augere.

So far only Airtel has started commercial services in two of the four circles. Airtel has commenced services in Kolkata and Karnataka but has not announced plans for Punjab and Maharashtra. Augere had announced a deal with Ericsson last year but has not launched services yet.

Aircel has said that it plans to start services by the end of the year. Qualcomm had got its spectrum only in April this year and then sold out stake to Bharti Airtel. It is not clear when Tikona and Reliance Industries-backed Infotel will launch fourth generation services. There have been reports of RIL’s launch early next year.

Ecosystem not mature enough

Industry experts said that the main reason for the delay is the lack of a mature ecosystem. The operators are looking to deploy a version of the Long Term Evolution (LTE) technology, which is being used only in select countries like China. As a result, there are not many low-cost devices available at present on which the 4G services can be offered.

There are also issues with the business model due to poor coverage of LTE technology in the 2300 Mhz frequency band. Operators are finding it tough to provide a network that offers seamless coverage without investing a lot of money in setting up thousands of base stations.

Experts say operators are either looking to set up 4G network in patches for fixed broadband services or are looking at acquiring more spectrum in an effort to reduce network rollout costs.

One of the operators said that there was no revenue loss to the Government because the players have paid close to Rs 40,000 crore upfront after winning the auction.

The operator also said that since the rollout obligation terms give them five years, there is no reason for any concern as of now.

>Thomas.thomas@thehindu.co.in

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