Bhutan has it, Sri Lanka has it, Bangladesh has it, Pakistan has it, over 100 countries in the world have it, but India doesn?t have it. You guessed it right. It is 3G mobile communication facility. From the time glitch-free 3G made its appearance six years back, today, nearly 30% of all mobile subscribers worldwide use 3G systems. Let us first understand what this 3G (3rd generation) technology means. For a user of mobile communication, it means the availability of a broadband connection on his phone. Those of us who remember the experience of shifting from dial-up internet connection to a broadband connection will immediately understand that you are transported to a new world of experience. It is argued that in India the traffic is mostly voice, so how does it matter if 3G does not come in? But it does matter for several reasons.
Firstly, this technology is up to 2.5 times more efficient spectrally than 2G. This implies that for the same spectrum, 2.5 times more traffic or roughly 2.5 times more customers can be accommodated if only voice calls are being made. Surely that would give immense relief to customers from the congestion and call dropping they face and tolerate from today?s poor quality 2G networks.
Secondly, it is not for nothing that over 100 countries in the world have adopted this technology and the customer percentage is constantly rising despite India pumping in huge numbers of customers on its poorly performing 2G networks. With the rapidly rising numbers of telecom users, India?s telecom revolution is, indeed, praiseworthy. But when you know that this revolution could have had twice as much impact on the efficiency and growth of the economy, you have got to sit back and think, are we not missing something? A study of the International Telecommunications Union (ITU), a body of the UN, has reported that the impact of each broadband connection on growth of GDP of developing countries is twice as much as that of a telephone connection. 3G technologies and their upgrades such as HSPA and shortly to come LTE are precisely meant to rapidly provide such connections.
A key aspect of 3G technologies that use Internet Protocol (IP) is their particular suitability for providing value-added services. Unfortunately, in our country, value-added services are synonymous with ring back tones download and nothing more. It is the vast variety of value-added services introduced by DO Co Mo in Japan that provided a real boost to mobile services there. True, in India we have a long way to go in establishing connectivity and access to mobile services in vast areas, but doing so with a broadband connection and given our capability to develop software for relevant applications, the economy will receive a huge boost from 3G induction now instead of waiting for it forever. Once we understand the importance and usefulness of having 3G technologies, the obvious attempt should be for the government to see to quick induction of these technologies. The requirement for this to happen is to have regulatory policies in place and make spectrum available to operators. The first TRAI recommendations came out in 2005. What was then needed was to determine how much spectrum in 3G band is available and then put it up for auction. A basic element of any sensible spectrum policy today is not to keep available spectrum unused and to constantly strive to create more commercially usable spectrum.
For various reasons this did not happen in India. Some hopes were generated from time to time with statements coming from the minister of communications and IT that finally 3G spectrum auction will take place. However, there have been worries about legal complications if the auction is held without having clear spectrum in hand. There are international instances of successful spectrum auctions under precisely similar conditions. For example, in 2006, the US carried out AWS auction for which against a base price of $2 billion, the auction actually generated $13 billion even though the spectrum became available several months later. Again in February, 2008 frequency slots were auctioned in the 700 MHz band even though the slots already in use for TV broadcasts were to become available only in February 2009. The slots actually became available in August 2009 – a further six months later. As to the outcome of the auction, a record $19 billion were generated.
Not only we are more than five years late (TRAI first recommended 3G spectrum auction in 2005). This postponement also implies postponement of 2.3 GHz spectrum auction. Both the 2.1 GHz (so called 3G band) and the 2.3 GHz band (so called BWA band) are required for the broadband revolution in the country, including delay in government initiatives for taking broadband to rural areas and even the implementation of the UID scheme. The financial implication of this delay in auction on our economy is seen in financial circles as reduced revenues and, therefore, higher deficit, which will lead to increase in indirect taxes and duties, thereby gravely impacting the economy?s growth. The key objective has to be to introduce 3G, or more precisely, using ITU language, BWA (Broadband Wireless Access) services if we want telecom to play its role to the hilt in boosting the economy and generating employment. Even if we accept the law ministry?s argument, we still have two clear slots in 2.1 GHz and two in 2.3 GHz. Let us disregard all lobby pressures and auction these right away. True, the price of spectrum will go up, but let us not forget that this is a one-time cost only and will not impact the business case to that extent.
?The author is former member, Telecom Regulatory Authority of India