Travel report part three (of five)
The mobile market in India is fragmented with a large number of operators and a multitude of regional licenses. The intense competition and very low prices has forced the operators to takeactions in order to reduce network costs. It is directly linked to how spectrum is allocated to operators.
India follows a unique method of spectrum allocation and pricing
The assignment of startup spectrum is based on availability and is carried out on a first-come-first-served basis for all licensees. The license is allocated for twenty years and the spectrum is co-terminuswith the license. At the end of twenty years the license is to be renewed at terms to be determined at that stage. The license conditions include a rollout obligation to cover certain percentage of the license area within a stipulated period. A licensee receives additional spectrum without an upfront payment beyond the initial assignment as and when their subscriber base crosses certain thresholds. This is known as the Subscriber Linked Criterion (SLC) for spectrum assignment. (from Prasad & Sridhar, Telecommunications Policy, volume 33, issue 9, 2009).
Each operator with a license is eligible for an initial assignment of 2* 4.4 MHz paired FDD spectrum for GSM technology or 2* 2.5 MHz paired FDD for CDMA technology. The bands (890–915)/( 935-960) and (1710-1785)/(1805-1880) MHz are allocated to GSM and CDMA make use of the bands (824-844/(869-889). For 3G services so far only 2* 5 MHz is allocated to each of four operators in each region (circle).
Roaming, Network sharing and Outsourcing of network operation
Operators without any spectrum license can cooperate with other operators using Inter Circle Roaming (ICR). However, the end-users can themselves implement “national roaming” by using phones with multiple SIM cards.
Network sharing is a common practice in India but it is organized in a totally different way compared to Sweden. In India the base station sites are usually owned and operated by separate tower companies. A tower company can be owned by a single operator, by two or more operators, or by an independent infrastructure company. The mobile operators rent space and pay a fee on commercial terms for the placement of equipment. The tower company provides the physical site, tower, power, cables, equipment room and other non-telecom equipment. The mobile provide active equipment, i.e. radio transmitters and receivers.
It is very common that the control and operation of a mobile network is outsourced to some other actor, typically a equipment manufacturer like Ericsson or Nokia Siemens Networks. From the discussion we have had with operators it is apparent that the operators cooperate very closely with the providers of the network equipment.
More spectrum and the national initiative for optical fibre
According to the National Telecom Policy (NTP 2012) 300 MHz will be made available the coming five years and after that an additional 200 MHz. For mobile broadband deployment in rural areas around 100 MHz will be available in the 790-862 MHz band. According to a representative for the Ministry of Trade there seems to be no major conflict of interest with the broadcasting industry.
For network deployment in rural areas the National Optical Fibre initiative is important. A national fibre networks that can be used as backhaul for cellular systems is believed to play an important role and to some extent compensate for the continued scarcity of spectrum.
Cognitive radio and secondary access of spectrum was discussed at the ITS India conference but it was not believed to play any major role the coming years. On one hand, India would be a country where use of TV white space would be of interest due to the low amount of spectrum per operator in combination with very high spectrum prices. On the other hand there are a number of factors that limit the interest for use of TV white spaces:
- Spectrum in the 700 MHZ band will be released,
- There are already (too) many operators
- Long term investments require stable and reliable access to spectrum.
The last aspect has been highlighted the last 6 months, during this period no Indian operator have made any major networks investments at all due to the uncertainty about spectrum allocation.