The fact that telecom policy makers have painted themselves into a corner has not surprised any one. Fortunately, it is still not too late to get out of this mess. We should act before industry has harmed itself immeasurably.

Trai had posed the right questions in its consultative process and had made the right choice of answers in most questions but possibly slipped in not appreciating or bringing out the linkage between various questions and the risks associated with piecemeal acceptance. Let us

revisit these.

No one should have a problem with the recommendation that there should be no cap on the number of operators since in a liberalised regime, there is no need for restrictions and there is no rational way to know what is the optimum number of players, except as determined by an undistorted market. Policy makers have interpreted it to imply that they should actually bend themselves and do everything to bring in new players. Surely in a market, which has an average of 6 to 7 players in each area and where HHI (measure of market concentration) is of the order of 0.2, there is no need for an extra push by authorities to bring in new players. Instead, government could have easily mandated mobile number portability and tightened the screws on the mobile operators to perform.

Next, Trai has rightly recommended that any player can choose any technology since Unified Access Licence is technology neutral. In fact, the choice is not limited to CDMA and GSM only but also covers 3G and WiMax or any other technology, which can offer ?access service?. Remember the licence is for offering access service and not for using a particular technology. That the government accepted this recommendation cannot be faulted.

Where then lies the problem, which has caused the government to put itself into a jam and open to unnecessary allegations? First, it lies in the action on the third question ?what should be the criterion for spectrum allocation?? because in the prevailing conditions in our telecom market, these questions are totally intertwined.

Both the regulator and the policy maker seem to have handled these questions as independent of each other. It would be obvious to any one that with a crunch over available spectrum, unless the market itself decides, pushing for a new player does not make sense. Second, it lies in piecemeal implementation of recommendation on technology and inequity in treating all applicants.

The right course for the government to get out of this situation even now is to accept Trai?s earlier recommendation and separate licence from spectrum, identify whatever spectrum is available and put it up for auction. Simultaneously, the government must announce its 3G policy since introduction of 3G will only ease pressure on the 2G spectrum requirement by taking away high-end users and by handling voice (a 2G specialty) far more efficiently than what 2G equipment is able to do.

Further, government should also announce the spectrum to be used for WiMax and start its auction process. The last step will provide an avenue for particularly keen operators who could not get either GSM or CDMA spectrum but are still keen to enter the mobile market based on their perception of the market.

In fact by taking these three steps, government would not only have eased the 2G spectrum problems (and got out of the present mess), side stepped the nearly impossible task of determining a subscriber based criterion for spectrum allocation, but would also have taken proactive step for the next telecom revolution viz. broadband spread in the country.

?The writer is a former member of Trai