Policy Can Wait, Telecom Firms Gear Up For 3g Era

[Arun 795]

Mumbai - May 11, 2008

Business Standard

Despite the lack of policy and clear allotment of spectrum, the domestic telecom industry is all set to usher in 3G services with service and equipment providers readying infrastructure.

3G - an International Telecommunication Union (ITU) specification for third generation of mobile communications technology - provides larger bandwidth, higher voice capacity and faster download speeds. The technology supports high-speed data transfers of up to 2 mbps, compared with 10 kbps on 2G and 144 KBPS on 2.5G.

There is scope and need for India to get into 3G technologies as it will help in minimising the digital divide between the rural and urban sectors, and between India and developed nations, Sanjay Kapoor, President (Mobile Services), Bharti Airtel said.

"For the telecom companies which currently offer 2G services in the country, the additional expenses required for migration to these services would be incremental," he said, adding this will help in faster rollout of the services in the country.

Bharti Airtel is betting big on 3G and has even completed testing the services across various infrastructure providers.

Reliance Communications (RCom) is another operator that is all set to board the 3G bandwagon. The company is ready with the 3G network and infrastructure and is all set to launch the services within 6 months of spectrum allocation.

According to S P Shukla, President (personal business), RCom, "Telecom, like every other sector, is evolving and 3G is the next phase in this cycle. We are ready to provide 3G services, and this will be done within 6 months of spectrum allocation. Our network is 3G capable and a range of 3G-enabled handsets are available across all our outlets."

Apart from Bharti Airtel and Reliance Communications, companies such as Vodafone-Essar and Idea and new licencees including Datacom Solutions and Unitech are planning to take the plunge.

Infrastructure players such as Alcatel-Lucent and handset-makers including Samsung and LG are gearing up for 3G services. ŗG is definitely happening in the country and there is a lot of buzz around it," Rajiv Khanna, CEO (India operations), Meridian Mobile, said.

Even though no company has firmed up 3G plans - a lack of "definite policy and uncertainty over 3G spectrum allocation" were issues worrying the sector - 3G aspirants were expected to roll out services starting with the four metros and major cities.

Handset-maker Nokia is also another telecom company that is betting on 3G and is ready with 3G handsets. Devinder Kishore, Director-Marketing, Nokia India, said, "We have always invested ahead of the curve. While 3G is not a reality in India now, we believe our investment will hold us in good stead in the long run and help offer 3G as soon as it goes live".

Global research and analyst firm Gartner expects a 3G policy to be in place by the fourth quarter of this financial year and rollout to begin by the first quarter of next year. The rollout will help in arresting the falling average revenues per user (ARPUs) as 3G operations would be driven by diverse content, including e-mail, video and mobile TV, said Neha Gupta, Senior Research Analyst, Gartner.

However, the high prices of 3G handsets - which are 3-4 times more expensive than 2G handsets due to the lack of mass availability - are a concern.

Alleviating the fears, Rajkumar Ragupathy, Product Concept Engineering Manager, Vodafone Group said, "The prices of 3G handsets will decline on mass adoption and by 2009, they will be similar to those of 2G handsets in the country".

3G services are expected to become common by the end of next year, replacing 2G services to a large extent.

[Honest 836]

^^^

Well, thats a great news my dear friends. 3G is a much awaited service in India. Now atleast we got a dealine for 3G.

Regards.

[kshah 452]

I dont understand why CDMA operators are not taking lead by introducing EVDO? THey do not require additional resources / spectrum to do it. Ofcourse, government permission is needed, but I dont think that is a problem. Now it seems with falling voice charges, they have realized that data and VAS are the only way to ramp up ARPU.

[Arun 795]

3G services to be rolled out till year-end

Press Trust of India / New Delhi May 23, 2008, 12:44 IST

The government on Friday said guidelines for 3G services will be issued next month and foreign players will be allowed to offer this service in the country whether they come through open auction route or via the existing law, which allows 74 per cent FDI in telecom companies.

"If there is common auction or open auction, there will be no bar. There is up to 74 per cent FDI allowed in Indian telecoms firm, and these partnerships can also start 3G service. Either way foreign players will be allowed," Telecom Minister Andimuthu Raja said.

Raja, who will discuss the issue of foreign players entry in the 3G services with Prime Minister Manmohan Singh soon, said the modalities of working out the spectrum auction for 3G services has been referred to the Law Ministry.

He also said operators could roll out services by January 2009 or end of this year. Raja said all existing operators are ready for 3G rollout and it does not need new infrastructure.

The department of telecom has already issued draft 3G guidelines. The 3G roll out has been stuck on two counts � release of spectrum by defence forces and differences between TRAI and DoT over the entry of foreign players.

DoT wants foreign players to come in, while sector regulator TRAI has recommended existing domestic players to offer 3G services that allow faster data download among other video applications.

The DoT and the finance ministry are in favour of allowing foreign players to bid for 3G spectrum to enhance competition and get a higher value for the scarce resource. TRAI says including foreign players would not only complicate the process but also increase the delay in the 3G rollout.

The regulator has also highlighted that around 12 players in each circle should be enough to realise a fair value and competition.

However, DoT wants to include more players in the bidding process in order to give a chance to foreign players who earlier could not enter the Indian market.

3G wireless network allows operators to transmit data, voice and video at a high speed, besides enabling Internet services on mobile devices. India is eyeing 3G network as a solution for lack of voice-centric 2G network capacity and slow growth of broadband.

[srk006 21]

Foreign players to be allowed in 3G telecom services: Raja

Business Standard

New Delhi - May 24, 2008, 0:19 IST

In stark contrast with the Telecom Regulatory Authority of India (Trai) recommendation that only Unified Access Service Licence (UASL) licence-holders should participate in 3G auctions, Communications Minister A Raja today suggested that foreign telecom companies, too, would be permitted to bid for 3G spectrum.

The UASL allows a company to offer triple-play services — voice, data and video — over a single broadband connection. 3G or third-generation services refers to communication standards and devices that will improve the speed and quality of services on mobiles.

Speaking to reporters on the sidelines of an Assocham summit, Raja said: "Either way, foreign players will be allowed. We have a 74 per cent foreign direct investment limit in the telecom sector. Whether there is common auction or open auction, there will be no bar on foreign players."

Trai's suggestion meant that only current mobile operators and new players like Unitech and Datacom Solutions, which recently procured licences, should be allowed to bid for 3G spectrum.

Raja's announcement, on the other hand, would pave the way for many international players like AT&T, Orascom and Qtel that have been keen to enter the country and could now do so by participating in the 3G auction.

Experts, however, caution that while this may lead to more competition in the 3G space, it might also force operators to overbid (like in Europe), forcing them to charge high tariffs and leading to unviable businesses.

However, the thinking within the department of telecommunications (DoT) is that while the price of the 2G licence has been kept low (companies have to pay Rs 1,580 crore for a pan-Indian licence) because it is meant for the masses, 3G is a premium service for which operators should be willing to pay more and charge consumers higher tariffs. DoT executives also said Raja has already apprised Prime Minister Manmohan Singh of the DoT's view.

Meanwhile, Raja said the policy would be announced in June and the draft has already been referred to the law ministry. He expects 3G services to be launched sometime at the end of this year or by January 2009.

Trai had recommended that with around 25 MHz of 3G spectrum available, there would be scope for around five players.

In discussions within the government it was decided that at least one chunk of 5 MHz would be reserved for state-owned companies like BSNL and MTNL while the others would be thrown open for auction, for which a base price has been fixed by the regulator.

With 10 to11 operators already in the market, the regulator felt there was already enough competition for auctioning 3G services as only four would eventually get a licence.

The regulator's contention was based on the fact that even after the defence services vacate spectrum, the total spectrum available in 2G will not be enough for even the 11 players.

But a new 3G operator has to be given a UASL licence, which comes bundled with 6.2 MHz of 2G spectrum. With shortage of spectrum the government will not have enough to offer the new player 2G spectrum.

[Arun 795]

3G roll-out set to hit roadblock

Monday , June 02, 2008 at 2131 hrs IST

Financial Times

It is now a group of ministers which will take a call on whether foreign and domestic Companies can participate in the auction for 3G spectrum. The attorney general of India, who was asked by the government to sort out the issue, has made this recommendation.

This means the roll-out of 3G services may not happen during the UPA government’s remaining term. Bids can only be invited after the ministers’ group takes a decision. Given the timeline usually required by Companies to roll out the services, which is a minimum of seven to eight months, 3G is unlikely to happen in the immediate future.

Minister for communication and IT A Raja had recently said the roll-out would be completed by January 2009.

The latest twist in the 3G auction business follows the difference between the department of telecommunication and the Telecom Regulatory Authority of India. The department, supported by the finance ministry, favours the inclusion of new players in the auction, but the regulator wants no new participants in order to avoid complications. The DoT had asked the Attorney General to decide whether foreign and new domestic players be allowed to participate in the 3G auction.

As reported by FE earlier, there were technical constraints in allowing new players to participate in the auction of the 3G services. Allowing new foreign players, for instance, would entail granting of a unified access service licence (UASL) to them for 3G services. If the licence is provided, the government will find it impossible to stop them from competing with the existing 2G service providers in the country, except through an amendment of the licence terms, which could be challenged in a court.

The DoT and the finance ministry had felt that more players be allowed as that would generate more revenue for the government for a resource so scarce.

But Trai had been of the view that, since the existing Companies already had the requisite infrastructure in place, there were enough players to bid competitively for the scarce resource. It also felt that allowing new players would needlessly delay the roll-out of 3G.