Trai reaches out for higher frequency

The telecom regulator’s most-awaited recommendations on the division of spectrum among its users has kicked up a storm in the telecom t...

The telecom regulator’s most-awaited recommendations on the division of spectrum among its users has kicked up a storm in the telecom tea cup. The recommendations, which need government approval, do not suggest freeing the highly-wanted 1900 MHz frequency to cellular players. Instead, Trai suggests that the two warring cellular factions (CDMA and GSM) share a higher frequency band — 2 GHz — which, in turn, could make new technologies like WiMax more expensive.

Until Thursday, both factions in the telecom space were hoping to bag the 1900 MHz spectrum and introduce 3G services by the year-end. However, Trai did little but promise a sizeable spectrum booty somewhere in the future, in an entirely different bandwidth.

Trai said on Friday that 1900 MHz is controlled by Armed Forces and cannot be immediately vacated for private use. But its chief Pradip Baijal assured that the shift to 2 GHz will at least better distribute the load on existing bandwidth. To sort out the mess, Trai has asked the government to set up a high-level Group of Ministers (GoM), which will need the participation of the telecom, finance and defence ministers.

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But as a breather, Trai has offered a discount on spectrum charges, in two ways. First, it has slashed the ceiling on spectrum charges by 2 to 4 per cent. The rider here is that those sitting on un-used spectrum will pay an additional 2 per cent for two years and face cancellation beyond that.

Second — this is relevant for rural Internet penetration — Trai has worked out a complex discount formula: going by this, service providers willing to share bandwidth agreeably will pay only 33 per cent of its cost. Operators who want spectrum exclusively will not get the discount.

Acceptance for the formula could prove crucial: For one, the government targets providing 200 million new telephone connections by 2007. Only 50 million of these are to be fixed lines, leaving the onus of growth on wireless services.

But on Friday, both the GSM and CDMA lobbies displayed reluctance to move to the 2 GHz spectrum to make these missions a reality.

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The CDMA lobby claimed that the recommendations are a setback. CDMA technology does not work on 2 GHz yet said S.C. Khanna, of AUSPI. COAI also said GSM equipment will not work on the new bandwidth for at least a year. It complained that the new system will give CDMA players a ‘‘back-door’’ entry into 3G.

The Trai Template

	Impact on consumers • GSM prices could roll back if operators roll-out on 2 MH Impact on companies • Cost of spectrum is significantly lower • Terrestrial services will cost less to provide Impact on rural consumers • Trai has not done much for them. The 2 MHz bandwidth is not very good for line-of-sight technologies like WiMax, which need spectrum allocations in lower bands. Trai’s verdict Spectrum is too less: We need more — much, much more — just to meet targets