Allow airwave sharing

Imagine a soap maker ‘A' with an established marketing network in Delhi wanting to sell his product in Chennai, where there is an equally entrenched existing local player ‘B' having similar intent to launch in Delhi. It is quite possible in this case that ‘A' and ‘B' would enter into an arrangement to use each other's distribution channels to gain access to new markets from their individual standpoints. If this suits both ‘A' and ‘B', should anybody have objections to their going ahead? The only one who may not want it would be a third soap maker ‘C', who is already present in both Delhi and Chennai and has reasons to block the entry of a new brand. Common sense would, however, dictate that ‘A' and ‘B' should be allowed to do what they see as a mutually beneficial deal. Consumers, too, would welcome the option to try out a new soap.

The above soap fiction is relevant to the current imbroglio over 3G spectrum-sharing agreements between mobile operators. These so-called intra-circle roaming pacts have arisen from the fact that no single operator today has 3G spectrum, enabling it to offer high-speed mobile internet and data services in all the 22 telecom circles of the country. To get around it, they have been entering into deals to launch 3G services in each other's circles — a la our soap makers — and thereby gain a pan-India footprint. Thus, an Idea Cellular, which does not have 3G spectrum in Delhi, has been operating in the city using the airwaves belonging to Airtel and Vodafone, and likewise offering them the spectrum it had won in Kolkata. The Department of Telecommunications (DoT) has frowned at these partnerships, saying it is “not permissible” for operators to provide 3G services in areas where they have no spectrum rights. But when Airtel and Vodafone have no objection to Idea Cellular signing up customers in Delhi, why should it particularly bother DoT? If an operator has paid for spectrum through competitive bidding for a certain circle, shouldn't it be left to him to decide how best to leverage it, including by entering into tie-ups with other operators? Moreover, it is not that operators weren't keen to offer pan-India services. That freedom was denied by DoT's own auction rules, which did not permit more two 3G players in each circle, forcing them to go in for arrangements it now deems illegal. DoT's move defies logic from a public policy perspective as well. The licensed spectrum automatically limits the volume traffic going through it. An operator would have no incentive to overload it by taking on the traffic of other players, if it results in his own customers getting dissatisfied with the service quality. In the event, his actions can only be seen as better utilisation of available resources.

The DoT's hostility to 3G ‘roaming' pacts could have a bearing on the next-generation 4G mobile broadband services scheduled for rollout next year. Only one player (Reliance Industries) now has the spectrum to launch these across India, whereas the others have it individually for only select circles. But through sharing arrangements similar to that in 3G spectrum, they, too, can expand their 4G operating footprint. Is consumer interest hurt by having more than one pan-India 4G services provider?

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