The telecom market is one of India?s most competitive. Like in any other similar market, the role of the telecom regulator or government is not to pick winners. They must ensure that players (e.g. Airtel, Reliance, BSNL, etc.), or technologies (e.g. GSM, CDMA, Wi-Fi, 3G, LTE etc.) or even tariff packages, can compete fairly and robustly for the consumers? business. In the case of wireless services, players cannot compete without fair access to a vital resource: radio frequency spectrum. The current shortage of spectrum for 3G, therefore, poses a regulatory barrier for the growth of the service, irrespective of whether 3G eventually prevails in the marketplace. Several experts have recently alluded to a promising way to freeing up additional 3G spectrum. It can facilitate wireless broadband services for consumers, reassure 3G players who paid billions in the auction for 3G spectrum, and bring to the government substantial revenues from transparent spectrum auctions in the future.

The proposal is simple. It envisages defence forces freeing up 15 MHz of their unused spectrum in the 2.1 GHz band for 3G services and use, instead, the 1900 MHz currently reserved for refarming the 800MHz spectrum used by CDMA players. The 15 MHz vacated by defence can meet the current needs of 3G operators and can be auctioned to raise substantial revenues for the exchequer. This will require a tweaking of the department of telecommunications? (DoT) working agreement with defence forces to share 150 MHz each of the 1700-2000 MHz spectrum band, without changing the amount of spectrum that either side gets.

The proposal to offer the 800 MHz, which was earmarked for refarmed CDMA services, to defence forces appears self-serving. However, the impact of the proposal on the CDMA players is arguably notional. Trai accepted that even the 15 MHz in 1900 MHz band identified for refarming will be insufficient as recently as May 2012. This would require defence to vacate more spectrum. Trai also pointed to the concerns of DoT and others about interference between GSM- and CDMA-based 3G services in the 1900 MHz band. Therefore, the amount of spectrum needed in the 1900 MHz band to complete the refarming exercise for CDMA cannot be guaranteed without reviewing the DoT-defence arrangement.

Recovering 2.1GHz spectrum for 3G from defence makes eminent sense. Most of the world already uses the same 2.1 GHz band for 3G and the resulting economies of scale are continually driving down the prices of smartphones. This is critical to the spread of mobile broadband in low-income countries like India. Consumers also, typically, lack the money to buy, electricity to power, and familiarity and knowledge to use the larger, and more complex PCs and laptops.

Other 3G bands, or 2.3 GHz spectrum auctioned for Broadband Wireless Access (BWA) services in India, or the 700MHz, which the government might auction in the coming months, lack the benefits of the 2.1 GHz band. Broadband is, admittedly, cheaper to deploy in the lower frequency band, like 900 MHz, which offers a longer range. However, no company besides BSNL/MTNL, has this spectrum in all telecom circles to enable seamless deployment across India. The 700 MHz band is cheaper for setting up networks than even 900MHz. However, its recent entry on the scene and the absence of large-scale deployment anywhere means that the corresponding network equipment and devices are expensive and scarce. This makes the economies offered by 2.1 GHz that much more attractive.

It is arguably premature to reserve spectrum in 1900 MHz for refarming the 800 MHz used by CDMA services; since the exercise cannot be imposed during the lifetime of the current CDMA licences, which have 10 years left still. This is, however, enough time to complete the customised optical fibre network proposed for the defence forces. Once that is ready, the defence should find it easier to free up 1900 MHz spectrum needed for refarming the 800 MHz, if necessary, when the CDMA licences expire.

There is another reason to implement the current proposals. They offer the opportunity to derive sooner the considerable value of unused spectrum in the 1900 MHz and 2100MHz bands. A government can miss this if it is more focused on ensuring that citizens (read the exchequer) receive a fair price for commercial use of a scarce natural resource like spectrum. It is a travesty if an inexhaustible resource remains unused, incurring a huge opportunity cost in surrendered value. It is therefore necessary, but not sufficient, to hold auctions for allocating spectrum for commercial use. They must be timely too. The virtual standstill in the allocation of spectrum for over two years suggests that this is not a priority that it deserves to be.

The above proposals for releasing spectrum for 3G will help bring affordable mobile broadband services for consumers and require no regulatory compromises. They do not involve regulators picking winners; they make no assumptions about the competitiveness of CDMA, 3G or any other technology or service. Their merit derives from their practical approach to freeing spectrum for 3G services, which already has more customers than any other broadband technology currently available in India.

The author is a telecom consultant