The document discusses issues with auctioning wireless spectrum licenses in India. It argues that auctioning spectrum long-term is unworkable given the fast pace of technology changes. Spectrum should be allocated on a short-term "right to use" basis and adjusted as needed. The growth of telecom services should be prioritized over business interests. De-linking spectrum from licenses and potential foreign ownership of spectrum also raise security and operational concerns. The future may see a reduced need for spectrum with convergence of technologies. The document advocates for continued allocation of spectrum to operators on a fixed cost basis tied to licenses.

1. It was wrong to sell wireless spectrum by auction route or else.
http://wp.me/p1ZsI2-3
Having been actively associated in the implementation of one of the early GSM systems
in India in 1995, I choose to remain stead fast in my opinion I had on this subject from
the inception of GSM, that in the fast changing Technology oriented systems, networks,
product and services, any planning on long term basis is unworkable both on the
technology front as well as in its business propositions. Therefore, the wireless spectrum
needed for the operation need to be planned according the same philosophy according to
the facts mentioned below. The Government, the regulators and Telecom Industry need
to understand and take the issues involved in close coordination between the stake
holders so that right decisions are made at the right time, as otherwise it will not only
hamper the growth of telecom industry as a whole but also will be harmful for the end
users as it will push the country towards losing the benefits of privatization in the long
run. In addition to killing the Telecom Goose that lay golden eggs it will also lead to
never ending litigation. I have been writing about this to all concerned and also in various
print and visual and social media websites for many years now.
Government, the Regulatory authorities and CAG and the Judiciary dealing with Telecom
issues should reexamine with an open mind whether giving out Spectrum, a limited
national resource to Private industrialists in a long term contact basis is the right choice
for the government and a workable business proposition for the Telcos based on the
following facts:-
Basically, growth of Telecom in the country is more in the interest of the nation than of
the Industrialists. The policies of Govt. on Service industries like Telecom need to be
people centric, not money centric.
1. Technology is changing fast. What is best today will become obsolete tomorrow. It is
an unworkable proposition to undergo cumbersome sell and buy process of fresh wireless
spectrum every time there is inception of new technology, like 3G, 4G, LTE and other
new generation networks yet to come.
In fact giving out a particular band width of spectrum on long term contract can never be
an option any where in the world as it does not fit into any long term business plan due
being a technology oriented business of fast changing nature. It is more so especially for
Indian Telcos as everything needed here in telecom business except some basic
infrastructure like towers are imported and hence dependent on the suppliers who
continuously innovate the technology, systems and products. Different technologies
would need different frequency layer and band width making it necessary for
Government and Indian telecom Industrialists to closely follow the world trends.
2. Wireless Spectrum is a non-renewable national resource and as such need to be
handled scrupulously and judiciously by Government and Regulatory authorities. The
ownership of the spectrum shall remain with Government, allowing only 'right to use' so

2. that spectrum can be withdrawn and reallocated where it is not being put to intended use
by any Agency or Operator. Therefore, re-farming and reallocation of the required
amount of spectrum on short term basis from time to time as and when required without
too much varying in its cost implication is the only way out, and not in selling out by
auction or otherwise every time when changes in technology happen.
3. Fast growth of telecom being the prime object, it is more in the interest of the nation
than for the Industries that required amount of spectrum is made available and given out
as and when needed, on lease and /or revenue sharing basis, initially for setting up the
networks and later for its expansion needs on 'right of usage' basis in a way to ensure its
smooth operation without delays, if necessary at subsidized rates so that the service cost
to end users will continue to remain low and the service is more and more available,
accessible and affordable to common man.
4. Telecom business houses are becoming behemoths and M&As are going to be the
order of the future. Giving out spectrum by open auction will end up in hoarding of this
limited national resource by few business houses and ownership of sold out spectrum to
many current service providers will ultimately end up in the hands of few Corporate. It
will have many negative impacts like blocking competition, non-availability of spectrum
for new technology roll outs by fresh entrants etc. Even the Government will find it
difficult to have spectrum for its own future needs.
5. With mergers happening, ownership of spectrum reaching the hands of companies
from other countries can pose various forms of security risks to the our country.
6. The complexity of de-linking spectrum from license and Pan-India License. In a
situation where Spectrum is de-linked from License or Network Operation /Service
provision as being proposed now, a situation will arise that will make it very complex to
follow the concept of various forms inter-working between different Pan India licensed
networks, and those Network operators who do not have Pan India License. This is
because for those who have Pan India service, the entire country becomes one service
area where it can have regional roaming with no extra roaming cost. Whereas a customer
of non-Pan India license holder roams into a Pan India network, it becomes national
roaming with implication of roaming charges. It also brings out technology related issues
of inter-operation of different networks using different frequency layers and different
technology devices. Please see my blog "A new outlook to usher in Pan India Telecom
and Unified Licensing'. http://wp.me/p1ZsI2-8W
While there is still no clarity on the issues related to technology based spectrum needs,
the proposal of de-linking spectrum from license also raise many more questions:-
a. Will both License and Spectrum be given with auction process? Which will be
auctioned first, License or Spectrum? For new entrant Telcos, what need to be obtained
first, License or Spectrum? What will happen if some one get License first and do not
qualify in spectrum auction or the other way around? Will an operator getting spectrum
first by auction automatically given license? If so what is this big idea of de-linking?

3. b. What happens to the incumbent Telecom operators? Building up of Telecom business
is a continuous process, of expansions, upgrades and migration to new technology.
Telecom being a service industry providing service to huge base of customers and
therefore, license of operation cannot be cancelled on a cut off date for whatever reason.
Being it so, how can Govt. ask an incumbent operator to get fresh license through auction
on expiry of existing tenure? How an incumbent operator can make sure that they can get
license through auction? What happens otherwise? Even if the License is being obtained
by auction, what about spectrum? What happens if they are not successful in getting
spectrum at affordable cost through auction process? Since the Spectrum is also proposed
to be given on a long term contract, what will the operator do if it had to change over to
other technology that work on entirely different layer of spectrum which the operator
need to buy by auction making the earlier investment redundant? How can an operator
plan for change over to new technology system for which he will have to obtain License
again through auction process? And then for obtaining spectrum required for it? It
becomes a situation that operators can plan new systems only after getting License and
spectrum before hand?
c. Re-farming is expected to make available enough spectrum causing a situation where
supply far exceed demand. In such a situation how can auction be an option? In that
situation, first of all the basic bid price need to be low as there is no justification to keep
the cost high when enough spectrum is available to be given out for all.
Secondly, in a situation where everyone is sure to get spectrum at the minimum bid
prize, why should any bidder will quote higher price? Then it goes back to the mode of
first-come- first- served.
If none of the incumbent operators participate in auction process, can Govt. impose
penalty or ask them to shut down operation? Ultimately Govt. will have to give required
spectrum as maintaining Telecom Service at affordable cost is more in the interest of
people, that is the Government, than that of the Industrialists.
7. It is mandatory to provide access between users of every Public Land Mobile Network.
How to charge for it, is just a matter of commercial policy. Otherwise a non-Pan India
service provider who do not have 3G licensed spectrum cannot facilitate its customers to
access a 3G customer in a Pan India network which is against the concept of PLMN. In
essence it makes it necessary for every Network operator to become Pan - India service
provider if it has to enter in 3G business and same will be true for 4G and other new
technology based business also. Such problems could be resolved only if spectrum is
given based on the principle of 'right of usage' instead of selling at high cost with sole
intention of making money out of it with no concern about its impact on the industry.
8. The need for segregation of Network Operation and Service Provision:
At some point it will be necessary to limit the number of network operators. In not far
future, India will have the second largest volume of telecom usage. For making available

4. required spectrum and its effective deployment, segregation of Network Operation and
Service Provision and will become inevitable.
With fast changing technology needing frequent inflow of fresh CAPEX, most of the
small players will not be able to sustain their business. The cost of rural networks being
high and revenue potential low, to enable quicker telecom penetration increases in rural
areas, it will become inevitable to segregate Network operation and Telecom Service
Provision so that the systems and networks set up by few operators and spectrum
available with them could be efficiently shared by dozens of Service Providers as
MVNOs, to keep the service cost low. Please see my blog Segregation of Service
Provision from Network operation / Universal Numbering Plan. http://wp.me/p1ZsI2-t
Segregation of Service Provision from Network operation will ensure better and
efficient usage of spectrum. If the spectrum is sold out to large number of licensees it will
defeat the concept of MVNO which is going to be the path of telecom growth in the
future.
9. New Generation Technologies will make umbrella spectrum usage redundant. The
mobility scenario in the higher data range will demand smaller and smaller cell areas and
hence closer handovers. As data rates going higher and higher, it cannot be managed by
the conventional Microwave linked cell sites of 2G/3G/4G etc., with the method of
spectrum utilization as being done now. The new generation mobile networks will
comprise Optical Fiber cable connectivity in most part of its network topology and WiFI
and other developing wireless technologies as the last mile and end links limiting the
spectrum needs as such. Please see my blog: Who need spectrum? http://wp.me/p1ZsI2-
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10. Convergence will be order of the future. With the advent of LTE and other new
generation technologies making the wireless portion of the network less and less, it will
lead to convergence of Systems, Network and user devices. The net effect is going to be a
reduced need for umbrella coverage of Wireless spectrum for various technology based
solutions in the future. As the scenario changes, the spectrum bought by many Telecom
providers at high cost now will be of less use later. Please see my blog 'Convergence of
Wired and Wireless networks'. http://wp.me/p1ZsI2-26
Auction of spectrum can never be an option. With the inevitable segregation of service
provision, the spectrum issue will change to a scenario where supply exceeding demand
which by itself eliminates the workability of auction route. Government's idea to counter
this by creating more players in telecom industry to keep up the demand for spectrum
with sole object of milking the telecom industry and that is perhaps the route cause of
most of the problems we see in the past few years. It will impact the entire scenario of
discrete needs and utilization of spectrum for various types of systems, network and
technologies from what is envisaged now.

5. If the spectrum given on long term contract at considerable high cost need to be
surrendered for change over to new technology system and network before the expiry of
its contract period, the proportionate amount shall be reduced from new spectrum cost.
The mess all these can create in Telecom Industry in India is anybody's guess. It is
astonishing why no one from the Industry bother to explain these facts to the Government
and Government in turn to the judiciary that is now made itself grossly involved in the
decision making process.
Considering above facts, the right decision shall be to continue allocation of required
bandwidth of spectrum to each Network Operator along with license for its right to usage
and additional license on a time to time basis on a fixed basic cost and/or revenue sharing
basis. It shall be on condition that the Network Operators who are given spectrum as per
such a license conditions to operate their network cannot sell it or lease it directly to
others and shall vacate the spectrum and surrender it back to Govt. when not used and not
required by them.
It is only prudent for the Government and TRAI, CAG etc., to take help of right Telecom
technocrats with futuristic vision and knowledge, to come to proper Governmental and
regulatory decisions. Otherwise it will end up in opening a Pandora's box landing the
Industry into endless litigation and hampering growth of Telecom penetration in the
country as well end up in killing the industry as a whole.
Conclusion: It is easy to understand now from what we have learned from the muddle
created in selling out 3G spectrum through process of auction for Government to
has become totally overshadowed with the resultant acrimonious and unending debates
and turmoil in governance and political arena with regards to some speculative loss due
to 2G spectrum allocation according to then standing principles.
Another fact is that with the advent of modern technology systems that work in much
higher frequency layers, the earlier technology systems become obsolete and the
spectrum used for it also become redundant drastically impacting its pricing. Hence the
argument that 2G spectrum could have been procured more income for government had it
been auctioned is illogical as the fact is other way around.
Please see my blog: The never ending Telecom muddle in India. http://wp.me/p1ZsI2-gG
If someone cares to analyze closely, it can be seen that all these current fuss about
spectrum is meaningless and will become a non issue later. I am sure, it will finally come
to pass that what Government did on 2G spectrum allocation was right and what it did on
3G spectrum sale is wrong and all these commotion is "Much a do about nothing". I
hope CAG will surely introspect about the propriety of selling out of wireless spectrum to
know whether his contention of loss in not selling 2G spectrum is right or not and will
chose to reconsider issue based on the above facts. In fact what CAG should have done

6. was to object selling out spectrum, a limited national resource by auction indiscreetly to
private industries on long term basis.
What went improper is Government trying to create to push in more stakeholders in the
telecom industry, perhaps to create artificial demand for spectrum for government to
make some quick money, or to counter the inertia of incumbent private operators in
taking expansion of telecom into rural areas. Of course, if any politicians or bureaucrats
did not care to follow the rules and procedures with obnoxious intentions to make
personal gains out of spectrum allocation, law should take its own course to punish them,
but definitely not by changing the right philosophy and methods that help people centric
policies of government.
Author: Abraham Paul. P. e-mail: papaul@hotmail.com Tweet @PA_Paul