It was wrong to sell wireless spectrum by auction route or else.

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Having been actively associated in the implementation of one of the early GSM systems in India in 1995, I choose to remain stead fast in my opinion I had on this subject from the inception of GSM, that in the fast changing Technology oriented systems, networks, product and services, any planning on long term basis is unworkable both on the technology front as well as in its business propositions. Therefore, the wireless spectrum needed for the operation need to be planned according the same philosophy according to needed for the operation need to be planned according the same philosophy according to the facts mentioned below. The Government, the regulators and Telecom Industry need to understand and take the issues involved in close coordination between the stake holders so that right decisions are made at the right time, as otherwise it will not only hamper the growth of telecom industry as a whole but also will be harmful for the end users as it will push the country towards losing the benefits of privatization in the long run. In addition to killing the Telecom Goose that lay golden eggs it will also lead to never ending litigation. I have been writing about this to all concerned and also in various print and visual and social media websites for many years now.

Government, the Regulatory authorities and CAG and the Judiciary dealing with Telecom issues should reexamine with an open mind whether giving out Spectrum, a limited national resource to Private industrialists in a long term contact basis is the right choice for the government and a workable business proposition for the Telcos based on the following facts:- following facts:-

Basically, growth of Telecom in the country is more in the interest of the nation than of the Industrialists. The policies of Govt. on Service industries like Telecom need to be people centric, not money centric.

1. Technology is changing fast. What is best today will become obsolete tomorrow. It is an unworkable proposition to undergo cumbersome sell and buy process of fresh wireless spectrum every time there is inception of new technology, like 3G, 4G, LTE and other new generation networks yet to come.

In fact giving out a particular band width of spectrum on long term contract can never be an option any where in the world as it does not fit into any long term business plan due being a technology oriented business of fast changing nature. It is more so especially for Indian Telcos as everything needed here in telecom business except some basic infrastructure like towers are imported and hence dependent on the suppliers who infrastructure like towers are imported and hence dependent on the suppliers who continuously innovate the technology, systems and products. Different technologies would need different frequency layer and band width making it necessary for Government and Indian telecom Industrialists to closely follow the world trends.

2. Wireless Spectrum is a non-renewable national resource and as such need to be handled scrupulously and judiciously by Government and Regulatory authorities. The ownership of the spectrum shall remain with Government, allowing only 'right to use' so

that spectrum can be withdrawn and reallocated where it is not being put to intended use by any Agency or Operator. Therefore, re-farming and reallocation of the required amount of spectrum on short term basis from time to time as and when required without too much varying in its cost implication is the only way out, and not in selling out by auction or otherwise every time when changes in technology happen.

3. Fast growth of telecom being the prime object, it is more in the interest of the nation than for the Industries that required amount of spectrum is made available and given out as and when needed, on lease and /or revenue sharing basis, initially for setting up the networks and later for its expansion needs on 'right of usage' basis in a way to ensure its networks and later for its expansion needs on 'right of usage' basis in a way to ensure its smooth operation without delays, if necessary at subsidized rates so that the service cost to end users will continue to remain low and the service is more and more available, accessible and affordable to common man.

4. Telecom business houses are becoming behemoths and M&As are going to be the order of the future. Giving out spectrum by open auction will end up in hoarding of this limited national resource by few business houses and ownership of sold out spectrum to many current service providers will ultimately end up in the hands of few Corporate. It will have many negative impacts like blocking competition, non-availability of spectrum for new technology roll outs by fresh entrants etc. Even the Government will find it difficult to have spectrum for its own future needs.

5. With mergers happening, ownership of spectrum reaching the hands of companies from other countries can pose various forms of security risks to the our country. from other countries can pose various forms of security risks to the our country.

6. The complexity of de-linking spectrum from license and Pan-India License. In a situation where Spectrum is de-linked from License or Network Operation /Service provision as being proposed now, a situation will arise that will make it very complex to follow the concept of various forms inter-working between different Pan India licensed networks, and those Network operators who do not have Pan India License. This is because for those who have Pan India service, the entire country becomes one service area where it can have regional roaming with no extra roaming cost. Whereas a customer of non-Pan India license holder roams into a Pan India network, it becomes national roaming with implication of roaming charges. It also brings out technology related issues of inter-operation of different networks using different frequency layers and different technology devices. Please see my blog "A new outlook to usher in Pan India Telecom and Unified Licensing'. http://wp.me/p1ZsI2-8W

While there is still no clarity on the issues related to technology based spectrum needs, While there is still no clarity on the issues related to technology based spectrum needs, the proposal of de-linking spectrum from license also raise many more questions:-

a. Will both License and Spectrum be given with auction process? Which will be auctioned first, License or Spectrum? For new entrant Telcos, what need to be obtained first, License or Spectrum? What will happen if some one get License first and do not qualify in spectrum auction or the other way around? Will an operator getting spectrum first by auction automatically given license? If so what is this big idea of de-linking?

b. What happens to the incumbent Telecom operators? Building up of Telecom business is a continuous process, of expansions, upgrades and migration to new technology. Telecom being a service industry providing service to huge base of customers and therefore, license of operation cannot be cancelled on a cut off date for whatever reason. Being it so, how can Govt. ask an incumbent operator to get fresh license through auction on expiry of existing tenure? How an incumbent operator can make sure that they can get license through auction? What happens otherwise? Even if the License is being obtained by auction, what about spectrum? What happens if they are not successful in getting spectrum at affordable cost through auction process? Since the Spectrum is also proposed to be given on a long term contract, what will the operator do if it had to change over to to be given on a long term contract, what will the operator do if it had to change over to other technology that work on entirely different layer of spectrum which the operator need to buy by auction making the earlier investment redundant? How can an operator plan for change over to new technology system for which he will have to obtain License again through auction process? And then for obtaining spectrum required for it? It becomes a situation that operators can plan new systems only after getting License and spectrum before hand?

c. Re-farming is expected to make available enough spectrum causing a situation where supply far exceed demand. In such a situation how can auction be an option? In that situation, first of all the basic bid price need to be low as there is no justification to keep the cost high when enough spectrum is available to be given out for all.

Secondly, in a situation where everyone is sure to get spectrum at the minimum bid prize, why should any bidder will quote higher price? Then it goes back to the mode of prize, why should any bidder will quote higher price? Then it goes back to the mode of first-come- first- served.

If none of the incumbent operators participate in auction process, can Govt. impose penalty or ask them to shut down operation? Ultimately Govt. will have to give required spectrum as maintaining Telecom Service at affordable cost is more in the interest of people, that is the Government, than that of the Industrialists.

7. It is mandatory to provide access between users of every Public Land Mobile Network. How to charge for it, is just a matter of commercial policy. Otherwise a non-Pan India service provider who do not have 3G licensed spectrum cannot facilitate its customers to access a 3G customer in a Pan India network which is against the concept of PLMN. In essence it makes it necessary for every Network operator to become Pan - India service provider if it has to enter in 3G business and same will be true for 4G and other new technology based business also. Such problems could be resolved only if spectrum is given based on the principle of 'right of usage' instead of selling at high cost with sole given based on the principle of 'right of usage' instead of selling at high cost with sole intention of making money out of it with no concern about its impact on the industry.

8. The need for segregation of Network Operation and Service Provision:

At some point it will be necessary to limit the number of network operators. In not far future, India will have the second largest volume of telecom usage. For making available

required spectrum and its effective deployment, segregation of Network Operation and Service Provision and will become inevitable.

With fast changing technology needing frequent inflow of fresh CAPEX, most of the small players will not be able to sustain their business. The cost of rural networks being high and revenue potential low, to enable quicker telecom penetration increases in rural areas, it will become inevitable to segregate Network operation and Telecom Service Provision so that the systems and networks set up by few operators and spectrum available with them could be efficiently shared by dozens of Service Providers as MVNOs, to keep the service cost low. Please see my blog Segregation of Service MVNOs, to keep the service cost low. Please see my blog Segregation of Service Provision from Network operation / Universal Numbering Plan. http://wp.me/p1ZsI2-t

Segregation of Service Provision from Network operation will ensure better and efficient usage of spectrum. If the spectrum is sold out to large number of licensees it will defeat the concept of MVNO which is going to be the path of telecom growth in the future.

9. New Generation Technologies will make umbrella spectrum usage redundant. The mobility scenario in the higher data range will demand smaller and smaller cell areas and hence closer handovers. As data rates going higher and higher, it cannot be managed by the conventional Microwave linked cell sites of 2G/3G/4G etc., with the method of spectrum utilization as being done now. The new generation mobile networks will comprise Optical Fiber cable connectivity in most part of its network topology and WiFI and other developing wireless technologies as the last mile and end links limiting the and other developing wireless technologies as the last mile and end links limiting the spectrum needs as such. Please see my blog: Who need spectrum? http://wp.me/p1ZsI2-82

10. Convergence will be order of the future. With the advent of LTE and other new generation technologies making the wireless portion of the network less and less, it will lead to convergence of Systems, Network and user devices. The net effect is going to be a reduced need for umbrella coverage of Wireless spectrum for various technology based solutions in the future. As the scenario changes, the spectrum bought by many Telecom providers at high cost now will be of less use later. Please see my blog 'Convergence of Wired and Wireless networks'. http://wp.me/p1ZsI2-26

Auction of spectrum can never be an option. With the inevitable segregation of service provision, the spectrum issue will change to a scenario where supply exceeding demand which by itself eliminates the workability of auction route. Government's idea to counter this by creating more players in telecom industry to keep up the demand for spectrum this by creating more players in telecom industry to keep up the demand for spectrum with sole object of milking the telecom industry and that is perhaps the route cause of most of the problems we see in the past few years. It will impact the entire scenario of discrete needs and utilization of spectrum for various types of systems, network and technologies from what is envisaged now.

If the spectrum given on long term contract at considerable high cost need to be surrendered for change over to new technology system and network before the expiry of its contract period, the proportionate amount shall be reduced from new spectrum cost.

The mess all these can create in Telecom Industry in India is anybody's guess. It is astonishing why no one from the Industry bother to explain these facts to the Government and Government in turn to the judiciary that is now made itself grossly involved in the decision making process.

Considering above facts, the right decision shall be to continue allocation of required Considering above facts, the right decision shall be to continue allocation of required bandwidth of spectrum to each Network Operator along with license for its right to usage and additional license on a time to time basis on a fixed basic cost and/or revenue sharing basis. It shall be on condition that the Network Operators who are given spectrum as per such a license conditions to operate their network cannot sell it or lease it directly to others and shall vacate the spectrum and surrender it back to Govt. when not used and not required by them.

It is only prudent for the Government and TRAI, CAG etc., to take help of right Telecom technocrats with futuristic vision and knowledge, to come to proper Governmental and regulatory decisions. Otherwise it will end up in opening a Pandora's box landing the Industry into endless litigation and hampering growth of Telecom penetration in the country as well end up in killing the industry as a whole.

Conclusion: It is easy to understand now from what we have learned from the muddle Conclusion: It is easy to understand now from what we have learned from the muddle created in selling out 3G spectrum through process of auction for Government to

has become totally overshadowed with the resultant acrimonious and unending debates and turmoil in governance and political arena with regards to some speculative loss due to 2G spectrum allocation according to then standing principles.

Another fact is that with the advent of modern technology systems that work in much higher frequency layers, the earlier technology systems become obsolete and the spectrum used for it also become redundant drastically impacting its pricing. Hence the argument that 2G spectrum could have been procured more income for government had it been auctioned is illogical as the fact is other way around.

Please see my blog: The never ending Telecom muddle in India. http://wp.me/p1ZsI2-gG

If someone cares to analyze closely, it can be seen that all these current fuss about If someone cares to analyze closely, it can be seen that all these current fuss about spectrum is meaningless and will become a non issue later. I am sure, it will finally come to pass that what Government did on 2G spectrum allocation was right and what it did on 3G spectrum sale is wrong and all these commotion is "Much a do about nothing". I hope CAG will surely introspect about the propriety of selling out of wireless spectrum to know whether his contention of loss in not selling 2G spectrum is right or not and will chose to reconsider issue based on the above facts. In fact what CAG should have done

was to object selling out spectrum, a limited national resource by auction indiscreetly to private industries on long term basis.

What went improper is Government trying to create to push in more stakeholders in the telecom industry, perhaps to create artificial demand for spectrum for government to make some quick money, or to counter the inertia of incumbent private operators in taking expansion of telecom into rural areas. Of course, if any politicians or bureaucrats did not care to follow the rules and procedures with obnoxious intentions to make personal gains out of spectrum allocation, law should take its own course to punish them, but definitely not by changing the right philosophy and methods that help people centric but definitely not by changing the right philosophy and methods that help people centric policies of government.

Author: Abraham Paul. P. e-mail: papaul@hotmail.com Tweet @PA_Paul