For registration call @ 9958826967

Spectrum Auction - 5G and Broadband (14 October 2020)

Spectrum Auction - 5G and Broadband (14 October 2020)

Why in News:

Industry bodies BIF and COAI fight over delicensing of E and V bands.

Context:

The issue of delicensing E and V telecom spectrum bands has divided industry associations BIF & COAI. The bands are considered optimum for providing mobile broadband back-haul, while its utility for 5G services is also evolving. On September 28, COAI had written to communications minister Ravi Shankar Prasad, reiterating its opposition to delicensing of spectrum in the bands. Reacting to the COAI letter, BIF wrote to the telecom secretary, opposing auctioning of spectrum in these bands as it goes against international best practices and TRAI.

Background:

Licensing framework has been an integral part of India’s telecommunication law.

Under the Indian Telegraph Act, 1885, section 4 gives power to the government to grant licence to any person to establish, maintain or use a telegraph.

The Indian telecom sector was entirely under government ownership until 1984, when the private sector was allowed in telecommunication equipment manufacturing only.

Since 1992, the government has allowed licensing in the telecom sector.

Summary of the Debate

Key Points:

  • The E and V bands are globally used by operators to boost backhaul transmission.
  • The utility of E and V bandsfor 5G services is also evolving.
  • Telecom operators wants central government to release the E and V band spectrum due to the increasing demand of wireless data.
  • Internationally, APT has already included E and V band in the International Mobile Telecommunications (IMT) 2020 and they have recommended the International Telecommunication Union (ITU) to do the same.

Suggestions made by Cellular Operators of India (COAI):

  • The airwaves could be used as access spectrum by unlicensed players, if E and V band spectrum were delicensed.
  • It will lead to lack of opportunity for licensed telecom companies to create adequate backhaul capacity.
  • It may also lead to huge loss in government revenue from spectrum usage charges and licence fee.

Suggestions made by Broadband India Forum (BIF):

  • Auctioning of spectrum in E and V bands would deny benefits of broadband connectivity to the consumers, and it goes against the global best practices.
  • E and V bands cannot be placed on the same footing as mobile access spectrum.
  • Supreme Court ruling of 2012 cancelling allocation to licences pertained to holders of mobile access spectrum.

Challenges in Telecom Sector:

  • India’s licensing regime does not prevent delicensing despite the Supreme Court judgement, in fact the government on its own has been doing this.
  • Telecom is an essential service and the type of levies and the prices that the government is imposing on telecom is far too high of what they should do on essential services.
  • The countries where this has become a free spectrum are highly fiberized and India is nowhere near fiberized. Only around 25% of Towers in India are connected with fibre networks, whereas in developed nations, it is in excess of 70%.
  • Sometimes, state governments charge a huge amount for permitting the laying of fiber, etc. Despite the central government giving guidelines to state governments about the pricing of Right of Way (RoW) charges, itis not happening.
  • There is lack of Telecom Infrastructure in Semi-rural and Rural areas.
  • There is very low broadband penetration in the India.

             

Pros. Of licensing regime:

  • Having a tight leash on misuse of applications which are running on spectrum.
  • With licensing, lawful interception, data privacy can be enforced on operators who are going on to this spectrum.
  • Government earn huge revenue from spectrum usage charges and licence fee.

Way Forward:

  • The levies and price imposed by government on telecom sector has to be looked into and it should be brought down.
  • The policies, regulation and fiscal measures have to be looked at fresh by the government.
  • India should actually be trying to get the best of the world’s best practices; we should recognize the opportunity that these E and V bands offer and fix the difficulties in our licensing regime so that we do not lose out on the E and V opportunity.
  • Government action in partnership with Telcos and state government is extremely important.
  • Government is need to recognize the telecom as an essential service and reduce the charges that they put as entry level charge.

Important points made by the Guests

Lt. Gen. S. P. Kochhar (Retd.), Director General, Cellular Operators Association of India 

  • E and V band are essential for 5G. Initially when the TRAI (Telecom Regulatory Authority of India) guidelines came out that time 5G was not in existence, 4G has just about entered the market and that guideline came at that particular time.
  • Now, E and V band can also be used for access as well as backhaul and there is no way we can distinguish as to whether it is used for access or backhaul.
  • It militates against the Supreme Court judgement. The Supreme Court had given a very clear and a definitive judgement for access network but with E and V migrating into access, it becomes mandatory for government to auction it, otherwise there will be a huge amount of revenue loss in the government.
  • Government is providing similar type of services to the subscribers; therefore, we should be treated at par with each other. So, if the Telcos are being asked to pay for a particular spectrum then everybody else who’s using that spectrum for similar services should also be asked to pay for the spectrum.
  • Covid has shown us that telecom has become a foundational sector. It is no longer a vertical, it is a horizontal, on which other industries and other verticals will base their progress.
  • 5G is something which is going to increase the connectivity, give capacities which are desired and will be the first technology which will have a man machine talking to each other.

Mahesh Uppal, Independent Consultant, Broadband India Forum

  • Both E and V band are currently liberalized in more than 20 countries in one case and more than 80 countries in the other and in most cases these countries are at fairly advanced process when it comes to the deployment of 5G.
  • The Supreme Court has asked for spectrum auctions and the judgement which supreme court made is about unequal treatment to people and also about transparency.
  • To allocate E and V without auction neither contradicts the transparency part nor does it actually leave anybody worse off for the simple reason that all players who will seek to use it in the liberalized mode will be at par in that sense.
  • There are issues in the licensing regime and we are getting wrong end of it, the wrong end is the following that ideally across the world, the telecom operator actually advocating the liberalization of spectrum.
  • We have created a licensing anomaly where some people find it more equitable that others are licensed. Now that is something that our licensing regime is responsible for not actually the approach to E and V band.
  • Close to 30 percent of the telcos revenues go back to the government and that is a meaningless cost for an infrastructure that the whole economy uses. The costs that are being generated are generated because of a licensing regime and the same licensing regime getting us to a situation where we are opposing even things that are internationally good ideas. For instance, we are opposing E and V band liberalization, we are not supportive of wifi hotspot, cable tv operators participating in telecom networks, etc.

Sadhna Dixit, Former Member, Telecom Commission

  • We have moved away from administrative pricing of the spectrum to auction based pricing. So, auction of the spectrum will be necessary. What however need to be considered is that should they be only for the purpose of resource mobilization, would that be the primary focus of auctions or should welfare element also coming to that and the spillover effects of the technologies that come in on account of these spectrum auctions.
  • With regard to the license fee and spectrum usage charges being there over the period of the license, we need to clearly look at the reserve price that is set for the spectrum auctions.
  • As far as 5G is concerned, the whole ecosystem needs to be ready, in terms of infrastructure, in terms of equipment, in terms of user case, in terms of applications and the skill sets also.
  • Before the commercial launch of the service, we could consider whether we could give that as an experimental basis to the service provider and see that how they put it to commercial use because that also will take time.
  • Possibly, we need to start with some kind of a test not merely the test but expanding it a little further and see how it can be utilized in real life before going in for commercial use.
  • At that point, one needs to consider very carefully as to how to charge it.
  • Other issues are to look at the entire regulatory regime concerning this area, the right of way which is there, the applications and software which is there, the data privacy issue which is there, etc.
  • Once we moved in to the auction mode, we need to address the issue of the license fee, the revenue share model that we are currently having and the rate that we are applying for that.

Comment

Upload File