2 Reliance

Presentation toThe Expert Committee on Spectrum

Date: 26th Nov 2007

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1. About RCOM

2. What is the real issue?

3. Spectrum Allocation

4. Spectral Efficiency innovations & TEC

Report

5. Re-farming, Re-alignment of Spectrum &

Capital Efficiency Measures

6. Summary & Recommendations

Presentation FlowPresentation Flow

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Reliance CommunicationsReliance Communications

Largest fully integrated private sector communications company in India

5th largest company with market cap of over Rs. 1,50,000 Cr Second largest customer base serving 40 Mn customers. Only operator providing both CDMA & GSM services

CDMA Pan India GSM 8 circles mainly in Eastern India

Received approval for pan India GSM rollout services Paid an additional fee of Rs. 1650 Cr. for GSM services RCOM has paid the highest fee – Rs 3100 crore for operating

mobile services. India’s largest and only Next Generation & IP based network

pan India

Fully committed to the Nation’s telecom growth in the entire value chain

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Parameter UoMLast 4 years

Current

Year March 08

Aggregate

Population Covered

% / Nos.

Crs.

50 %

55

40%

44

90%

99

Towns Covered

Nos. 10,000 13,000 23,000

Sites Nos. 14,000 26,000 40,000

Investment Rs.Crs. 32,000 20,000 52,000

RCOM – Exponential Growth Plan

RCOM’s Growth Plans – Significant contributor to India’s GDP Growth

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Widest Coverage Plan for 07-08

Worlds largest Wireless Network Rollout in a yearWill cover all locations with over 1000 population with Voice & Data

Coverage UoM Oct - 07 Mar-08

Towns Nos. 10,000 24,000

Villages Nos. 300,000 500,000

Population % 55 90

Key Religious Sites

Nos. 333 677

Railway TrackKms %

48,000 65 %

63,000 85 %

National HighwaysKms %

35,000 60 %

55,000 95 %

State HighwaysKms

%85,00045 %

153,00080 %Rs. 20,000 Crs Capex

LargestUSO Roll ou7230 sites

What is the real issue?

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Adoption of spectrum allocation criteria which:

1. Promotes spectral efficiency

2. Maintains and ensures the quality of service

3. Increases competition leading to achieve government targets.

What is the real issue?

What GSM Operators got / want

1. Received spectrum above 4.4 MHz almost with out any policy guidelines till 2006.

2. Received spectrum above contracted spectrum of 6.2 MHz

3. Continued to enjoy spectrum free

4. The March 06 WPC criteria was too low, necessitating revision

5. Both TRAI & TEC criteria in 2007, based on scientific inputs, now being contested - for

cornering & hoarding spectrum, & restricting competition.

6. Forcing the current framework to maintain oligopolistic interest.

What India needs

Need of the hour – Scientific approach for Spectrum Allocation norms

Spectrum Allocation

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Evolution of allocation criteria

No SUBSCRIBER CRITERIA till Feb.02 – Adhoc Approach Spectrum Charges Policy issued for 4.4 MHz and 6.2 MHz. Spectrum allocated up to 6.2 MHz without any policy framework

almost free till Feb.02.

February 2002

Spectrum Charges Policy issued for 8 MHz and 10 MHz. Spectrum allocated up to 10 MHz without any policy framework

almost free till Mar.06.

Spectrum allocation linked to Subscriber Criteria based on Metro &

Circle Category .

Criteria abysmally low - Operators continue to serve 2-5 times more

subscribers vis-a-vis the criteria, without difficulties.

Over 50 Million subscribers added by the private dominant GSM

players within 18 months, without any additional spectrum.

April 2002

March 2006

No policy and lenient criteria led to cornering of spectrum

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To refund 32 MHz*

excess spectrum

Evolution of allocation criteria

Aug.2007 Oct.2007

Allocation Criteria

Case for Refund@

Spectrum Availability

Revised & tightened by TRAI

Further revised by TEC Report

Start-Up Spectrum available for 3-4 new operators.

To refund 56 MHz**

excess spectrum

*Based on TRAI Norms

**Based on TEC Report

Adoption of TEC Criteria at the minimum – Right way forward

@ Across all Circles by all operators

First timeScientific approach

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Spectrum allocation without Policy

Operators allotted 10 MHz with out policy framework

S.N. Operator Circle Date w.e.f

1 Aircel Tamilnadu Dec-04

2 Bharti Delhi Jul-03

3 BPL Mumbai Sep-04

4 Vodafone Delhi Oct-03

5 Vodafone Mumbai Oct-03

6 Bharti Mumbai Jan-06

7 Bharti Karnataka Jan-04

8 Vodafone Gujrat May-05

9 Idea Maharastra Apr-04

Operators allotted 6.2 MHz with out policy framework

S.N. Operator Circle Date w.e.f

1 Aircel Haryana Jan-01

2 Aircel Rajasthan Jan-01

3 Aircel UP(East) Jan-01

4 Bharti AP Apr-00

5 Bharti Chennai Aug-99

6 Bharti Delhi Aug-99

7 Bharti Karnataka Apr-00

8 BPL Mumbai Aug-99

9 Aircel Chennai Mar-00

10 Spice Karnataka Apr-00

11 Spice Punjab Apr-00

Arbitrary & Adhoc approach allowed cornering & hoarding of spectrum beyond eligible & contracted 6.2 MHz

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WPC Criteria v/s Actual Subs.

Leading Operator - Mumbai

15

20

30

1.5

2

3

0

5

10

15

20

25

30

35

Mar'05 Mar'06 Oct'07

Su

bs

(mn

)

0

0.5

1

1.5

2

2.5

3

3.5

4

Su

bs

(mn

) /

MH

z

Subs (Lakh) Subs (Lakh)/MHz

Leading Operator - Delhi

16

20

36

1.6

2.1

3.6

0

5

10

15

20

25

30

35

40

Mar'05 Mar'06 Oct'07

Su

bs

(mn

)

0

0.5

1

1.5

2

2.5

3

3.5

4

Su

bs

(mn

) /

MH

z

Subs (Lakh) Subs (Lakh)/MHz

WPC criteria outdated, to be replaced at least by TEC Report norms

Subscriber / MHz …2 to 5 times

higher than WPC criteria

2.21.41038IdeaMaha.

5.00.8838VodafoneUP (E)

2.20.69.816VodafoneKolkota

3.00.58.616AircellChennai

2.411030VodafoneMumbai

2.911036AirtelDelhi

Actual vsWPC

Criteria

VLR Criteria Subs (Lakh) /

MHz

SpectrumMHZ

Customers (Lakh)

Leading operator

Key Circles

VLR:80% of subs

2.21.41038IdeaMaha.

5.00.8838VodafoneUP (E)

2.20.69.816VodafoneKolkota

3.00.58.616AircellChennai

2.411030VodafoneMumbai

2.911036AirtelDelhi

Actual vsWPC

Criteria

VLR Criteria Subs (Lakh) /

MHz

SpectrumMHZ

Customers (Lakh)

Leading operator

Key Circles

VLR:80% of subs

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Myths Propagated by GSM operators related to Spectrum

1. Poor network QoS due to paucity of Spectrum

2. Low ARPU and operators unable to afford additional capex

3. Indian operators require more spectrum as a) Have lesser spectrum relative to Global Operators

b) Higher MOU per sub in Indiac) already deployed available spectral efficiency enhancing technologies,

All the above continue to lead to excess & ineligible allocation of Spectrum to private dominant GSM operators

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Myth 1 - Propagated by GSM operators

95% operators meet the benchmark

In Metros, 100% of the private operators

have met benchmarks

QoS parameters needing attention are

POI congestion & Help line, which are

not related to spectrum

On the Contrary, QoS showing improving

trend over last 8 quarters

Spectrum availability is only one of the

many factors for QoS improvement

Source: Network QoS report by TRAI – Sep 2007

50

60

70

80

90

100

Jul-Sep-05

Oct-Dec-05

Jan-Mar-06

Apr-Jun-06

Jul-Sep-06

Oct-Dec-06

Jan-Mar-07

Apr-Jun-07

Accumulated downtime (<24 hrs)

CSSR (>95%)

Service access delay(<15 secs)

SDCCH / Pagingchannel congestion(<1%)TCH congestion (<2%)

Call drop rate (<3%)

% connections withgood voice quality(>95%)

QoS has improved over last 8 quarters due to availability of Spectrum

Poor network QoS due to paucity of spectrum

Reality

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Spectrum Availability is a low priority criteria for maintaining QOS.

Network Planning to meet Coverage & Capacity Objective

Optimal Frequency Plan using

Adhoc Technique

Availability of spectrum

Site Database Audit &correction .

Network Performance Requirements

Pri

ori

ty

Network Optimization – Drive Testing/ Analysis & Corrective action

Implementation of new features to improve network quality and capacity

Availability of Skilled Man power for Planning & OptimizationHighest

Lowest Spectrum is one of the low priority requirements to determine QoS


7 dimensions of QOS

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10%

15%

20%

25%

30%

35%

40%

2003 2004 2005 2006

EB

ITD

A(%

)

Australia Hong Kong India UK US Brazil

EBIDTA margin in India higher than any of the

developed countries in the world e.g. UK, USA, Hong

Kong, Brazil, Australia, Spain.

Highest EBIDTA expansion in the world during 2003-

2007. 17%-38%

Analysts forecast future EBIDTA margin expansion in

spite of falling ARPU

Indian Telecom Companies highly valued with

EV/EBIDTA multiple of ~15 by analysts - UBS,

Macquarie, Lehman Bros, Merrill Lynch

Over Rs. 50000 crore committed capex spends by

Wireless industry this year as Outlooks are healthy

Indian TelCos – valuations & EBIDTA margin among top 5 in the world Source : ML wireless Matrix, Q 4

2006


EBIDTA Margin Comparison

EBIDTA Margins (Q2, FY07-08)RCOM : 43%Airtel : 43%

Low ARPU and operators unable to afford additional capex

Reality

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Timing of network rollout & innovation availability & outlook different for developed markets & India India needs to deploy spectrally efficient solutions more aggressively due to low teledensity and its

unique demographic profile Indian telecom market is growing when technology is available for increasing spectral efficiency

many folds. Operators in USA, Hong Kong with lesser spectrum serve markets with much higher traffic density Higher CAPEX can be easily afforded by operators.

Source : Interconnect associates, Telecordia

Indian operators have relatively lesser spectrum, higher MOU per sub & have already deployed available spectral efficiency enhancing technologies, hence

require more spectrum

In France, Netherlands, Germany, Spain, UK have 100 MHz amongst 3-4 operators China has 60 MHz among 2 operators

Reality

Myth

Myth 3

GSM operators want to enrich themselves at the cost of national objectives by demanding more spectrum

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Bharti Case Study

28 Mn subscribers added over a base of 23 Mn subscribers (120% of base) added without additional spectrum in last over 18 months

S No.

CircleCurrent

Spectrum held

Spectrum issued date

Subsribers as on Eligibility date as per

WPC criteria for next

tranche (Mn)

Subscribers added without

additional spectrum as per current

criteria(Mn)

Spectrum in excess

beyond 6.2 MHz

Additional Spectrum

as per WPC criteria

1 AP 7.8 Feb-04 1.8 3.16 1.6 7.2

2 Gujarat 6.2 Apr-02 1.0 1.06 3.8

3 Karnatka 9.8 Jan-04 2.6 3.33 3.6 5.2

4 Maharashtra 6.2 Apr-02 1.0 2.47 8.8

5 Tamil Nadu 6.2 Mar-02 1.0 2.16 6.2

6 Haryana 6.2 Apr-02 0.8 0.08 1.8

7 Kerala 6.2 Mar-02 0.8 0.56 3.8

8 MP 6.2 Apr-02 0.8 1.48 6.2

9 Punjab 7.8 Feb-04 1.3 1.65 1.6 7.2

10 Rajasthan 6.2 Aug-00 0.8 2.11 8.8

11 U.P.(E) 6.2 Mar-05 0.8 1.61 6.2

12 U.P.(W) 6.2 Apr-02 0.8 0.55 3.8

13 WB 4.4 Mar-04 0.4 1.11 5.6

14 Assam 6.2 Mar-05 0.5 0.21 1.8

15 Bihar 8.0 Mar-06 0.9 2.45 1.8 7.0

16 HP 6.2 Sep-03 0.5 0.20 1.8

17 J & K 6.2 Mar-06 0.5 0.24 1.8

18 North East 4.4 Dec-04 0.3 0.10 1.8

19 Orissa 8.0 Mar-06 0.8 0.56 1.8 4.4

20 Delhi 10.0 Jul-03 2.0 1.60 3.8 5.0

21 Mumbai 9.2 Jan-06 2.0 0.15 3.0 3.2

22 Kolkata 8.0 Jan-05 0.8 0.72 1.8 4.4

23 Chennai 8.6 Jan-06 0.8 0.62 2.4 3.8

Average 7 MHZ

23 28 21 110

BhartiCriteria MHz

Refund*TEC 21

TRAI 11

AdditionalAllocation*

Demand

WPC 110

WPC+25% 78

WPC+50% 58

*Across all Circles

Demand for additional Spectrum – Invalid

Fit case for refund of 21 Mhz

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Vodafone Case Study

18 Mn subscribers added over a base of 19 Mn (100% of base) added without additional spectrum in last over 18 months

S No.

CircleCurrent

Spectrum held


Date of Eligibility for next tranche

as per current criteria


current criteria for

next tranche (Mn)



criteria(Mn)

Spectrum in excess

beyond 6.2 MHz

Additional Spectrum

as per WPC criteria

1 AP 6.2 Mar-02 Jul-06 1.0 1.09 1.8

2 Gujarat 9.8 May-05 May-06 2.6 2.66 3.6 5.2

3 Karnatka 8.0 Jan-05 Apr-07 1.8 0.62 1.8

4 Maharashtra 6.2 Dec-99 Oct-06 1.0 0.87 1.8

5 Tamil Nadu 6.2 Dec-99 Mar-07 1.0 1.19 1.8

6 Haryana 6.2 Jan-01 Mar-07 0.8 0.31

7 Kerala 6.2 Dec-99 Nov-06 0.8 0.80 1.8

8 Punjab 6.2 Jan-04 Jul-06 0.8 0.73 1.8

9 Rajasthan 6.2 Jan-01 Jul-06 0.8 1.55 3.8

10 U.P.(E) 8.0 Jan-06 Feb-06 1.3 2.48 1.8 4.4

11 U.P.(W) 6.2 Mar-05 Jun-06 0.8 1.52 3.8

12 West Bengal 4.4 Mar-04 Jan-06 0.4 1.75 5.6

13 Delhi 10.0 Oct-03 Aug-06 2.0 0.99 3.8 2.4

14 Mumbai 10.0 Oct-03 Mar-06 2.0 0.99 3.8

15 Kolkata 9.8 Jul-06 Mar-07 1.3 0.36 3.6 0.2

16 Chennai 8.0 Jun-06 May-07 0.8 0.21 1.8

Average 7.35 MHZ

19 18 20 34

Vodafone

Criteria MHz

RefundTEC 20

TRAI 9


Demand

WPC 73

WPC+25% 50

WPC+50% 34

Demand for additional Spectrum – Invalid : Fit case for refund of 20 MHz

*Across all Circles

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Idea Case Study

7 Mn subscribers added over base of 12 Mn (60% of base) added without additional spectrum in last over 18 months

S No.

CircleCurrent

Spectrum held

Spectrum issued

date

Date of Eligibility for next

tranche as per current

criteria


current criteria for next

tranche (Mn)



criteria(Mn)

Spectrum in excess

beyond 6.2 MHz

Additional Spectrum

as per WPC criteria

1 AP 8.0 Sep-04 Mar-07 1.8 0.83 1.8 4.4

2 Gujarat 6.2 Aug-00 Mar-06 1.0 1.15 3.8

3 Maharashtra 9.8 Apr-05 Dec-06 2.6 1.25 3.6 5.2

4 Haryana 6.2 Dec-99 Jan-07 0.8 0.08 1.8

5 Kerala 8.0 Mar-05 Oct-06 1.3 0.99 1.8 4.4

6 MP 8.0 Nov-06 Nov-06 1.3 1.11 1.8 4.4

7 Rajasthan 6.2 Dec-05 Not Eligible Not Eligible

8 U.P.(E) 6.2 Feb-06 Not Eligible Not Eligible Not Eligible

9 U.P.(W) 8.0 Jan-06 Sep-06 1.3 0.69 1.8 4.4

10 HP 4.4 Mar-02 Not Eligible Not Eligible

11 Delhi 8.0 Dec-05 Nov-06 1.3 0.52 1.8 2.0

Average 7.2 MHZ

11 7 13 30

IdeaCriteria MHz

RefundTEC 13

TRAI 11


Demand

WPC 30

WPC+25%

14

WPC+50%

12

*Across all Circles

Demand for additional Spectrum – Invalid : Fit case for refund of 13 MHz

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BPL Case Study

Criteria MHz

RefundTEC 3.8

TRAI 3.8


Demand

WPC 0

WPC+25% 0

WPC+50% 0

S No.

CircleCurrent

Spectrum held






tranche (Mn)



criteria(Mn)

Spectrum in excess

beyond 6.2 MHz

Additional Spectrum

as per WPC criteria

1 Mumbai 10.0 Sep-04 Not Eligible Not Eligible 0.00 3.8 0.0

BPL

Fit case for Refund of 3.8 MHz

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Reliance GSM Case Study

1.3 Mn subscribers added over a base of 4 Mn (32% of base) added without additional spectrum in last over 18 months

S No.

CircleCurrent

Spectrum held






tranche (Mn)



criteria(Mn)

Spectrum in excess

beyond 6.2 MHz

Additional Spectrum

as per WPC criteria

1 MP 6.2 Jan-01 Oct-06 0.8 0.44 1.8

2 West Bengal 6.2 Feb-04 Dec-06 NE

3 Assam 6.2 Oct-03 Jun-07 0.5 0.15 1.8

4 Bihar 8.0 Oct-06 Oct-06 0.8 0.56 1.8 4.4

5 HP 6.2 Aug-05 NE NE

6 North East 6.2 Jan-06 NE NE

7 Orissa 6.2 Sep-01 Jul-07 0.5 0.12 1.8

8 Kolkata 6.2 Mar-02 NE NE

Average 6.4 MHZ

Total 1.3 2 10

RTL Criteria MHz

RefundTEC 1.8

TRAI 1.8


Demand

WPC 9.8

WPC+25%

7

WPC+50%

3.8

Willing to return excess spectrum in Bihar in line with policy framework applicable to all

*Across all Circles

1.8

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Reliance CDMA Case Study

RCOM - CDMA Does not hold beyond 5

MHz contracted spectrum in any of the circles

RCOM willing to consider its claim to forego 13.75 MHz of spectrum as per WPC criteria

S.N. Service AreaCurrent

Spectrum held (MHz)

Spectrum in excess beyond 5

MHz

Additional Spectrum

as per WPC

criteria

1 Andhra Pradesh 5.00 1.252 Gujarat 3.75 1.253 Karnataka 3.75 1.254 Maharashtra 5.00 1.255 Tamil Nadu 5.00 1.256 Haryana 3.75 0.00

7 Kerala 5.00 0.008 Madhya Pradesh 5.00 0.009 Punjab 3.75 0.00

10 Rajasthan 3.75 1.2511 U.P.(E) 5.00 1.2512 U.P.(W) 5.00 0.0013 West Bengal 3.75 0.0014 Bihar 5.00 2.5015 Himachal Pradesh 2.50 0.0016 Jammu & Kashmir 2.50 0.0017 Orissa 3.75 0.00

18 Chennai 5.00 0.0019 Delhi 5.00 1.2520 Kolkata 5.00 0.0021 Mumbai 5.00 1.25

Average 4.35 MHz

13.8

RCOM

No additional Spectrum granted

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Tata CDMA Case Study

No additional Spectrum granted

S.N. Service AreaCurrent

Spectrum held (MHz)

Spectrum in excess beyond 5

MHz

Additional Spectrum

as per WPC

criteria

1 Andhra Pradesh 3.75 1.252 Gujarat 3.75 0.003 Karnataka 3.75 0.004 Maharashtra 3.75 1.255 Tamil Nadu 2.50 1.256 Haryana 3.75 0.00

7 Kerala 3.75 0.008 Madhya Pradesh 3.75 0.009 Punjab 3.75 0.00

10 Rajasthan 3.75 1.2511 U.P.(E) 3.75 0.0012 U.P.(W) 3.75 0.0013 West Bengal 2.50 1.2514 Bihar 3.75 1.2515 Himachal Pradesh 2.50 0.0017 Orissa 2.50 1.25

18 Chennai 3.75 0.0019 Delhi 5.00 2.5020 Kolkata 3.75 1.2521 Mumbai 5.00 0.00

Average 3.63 MHz

12.5

Tata

Tata - CDMA Does not hold beyond 5

MHz contracted spectrum in any of the circles

Eligible for 12.5 MHz of spectrum as per WPC criteria

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Comparison: TRAI to WPC criteria

Circle 6.2 MHz 8 MHz 10 MHz

Metro( D/M) 1.6 2.5 2.0

Metro (C/K) 2.5 3.8 3.3

A 2.0 3.8 3.6

B 2.7 5.0 5.0

C 3.0 5.0 6.7

TRAI criteria is 1.6 times to 6.7 times of WPC March 06Average 4 times of WPC criteria

Multiple : TRAI to WPC

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Comparison: TEC to TRAI criteria

CircleCategory

6.2 MHz 8 MHz 10MHz

Range Average Range Average Range Average

Metro (DL/MU)

1.2 to 1.4 1.3

1.3 to 1.5

1.41.7 to 2

1.9

Metro (CH/KOL)

1.0 to 1.2

1.1 1.1 to 1.3 1.2 1.5 to 1.8 1.7

A 1.1 to 1.7 1.5 1.0 to 1.4 1.3 1.0 to 1.5 1.3

B0.5 to1.6

1.2 0.4 to 1.4 1.00.4 to 1.5

1.0

C 0.3 to 2.0 1.2 0.3 to 2.0 1.2 0.3 to 2.8 1.2

TEC criteria lower than TRAI in 6 circles- HR, KL, PJ, HP, J&K, NETEC criteria is Average 1.2 times of TRAI criteria

Multiple : TEC to TRAI

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Internationally, Regulators have taken back / reallocated spectrum

In October 2007 Ofcom has initiated the re-farming of 15 MHz to 20 MHz of spectrum in 900 MHz band from Vodafone & O2. This spectrum was allocated in 1985

Returned Spectrum will be allocated to new / other eligible operators Value of returned spectrum estimated at Rs. 50000 Cr (£ 6 Bn)

UK

Re-farming of 10 MHz inter-se operators is practiced and implemented In 2004, Regulator directed spectrum re-farming between AT&T & T-

Mobile in New York & California statesUSA

Excess Spectrum 20 to 35 MHz held by MovieStar was directed to be returned in 2005.

Argentina / Chile / Peru

Global practices for excess spectrum

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Summary – Spectrum Allocation

At the minimum, subscriber allocation criteria recommended by TEC be

accepted or appropriately revised upwards based on further scientific

inputs.

Existing dominant GSM operators have been allocated spectrum without a

policy framework and are using excess spectrum which is also beyond

contracted amount of 6.2 MHz. Should be directed to refund the spectrum.

All new licensees or licensees having paid the prescribed fee for the

alternate technology should be allocated start up spectrum of 6.2 MHz.

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Summary – Spectrum Allocation

The available spectrum will allow commencement of services by minimum

4 operators/ licensees. This will yield for the Government of India

Rs 6500 Cr as Entry Fee

Upto Rs 20000 Cr as direct and Indirect taxes on full rollout of network

by new operator

The increased competition will benefit the country and consumers.

Accelerated growth in telecom penetration

Lower tariffs

Better coverage including rural coverage.

Better quality of services

Spectral Efficiency Innovations & TEC Report

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TEC subscriber criteria

Let us examine in light of available spectral efficiency technology innovations

Justified ?

Liberal ?

Stringent ?

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Continuous increase in teledensity will require deployment of more BTS, leading to increase in network capacity, without additional

spectrum

Spectral Efficiency –Basic Principle

Cooper’s Principle on Wireless Networks: Capacity enhancement is coming through reduction in Cell size

Shrinking Cell Size provides 2700 times more capacity as compared to additional spectrum which provides only 15 times capacity enhancement

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Shannon’s Principle:

There is a limit to capacity

Spectral Efficiency –Basic Principle

Capacity increase can be achieved by reducing interference by using spectral efficiency enhancement techniques

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Parameters for determining Subscriber based spectrum allocation criteria

1. Morphology Dense urban / urban / Sub-urban / Rural

2. Subscriber / traffic density distribution in different morphology

3. Spectrum allocated

4. Number of sites to cater specified traffic

5. BTS capacity utilization

6. Inter site distance

7. Spectral efficiency innovations

Quantum of Spectrum allocated is just one of the parameters

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TEC work flow chart - Subscriber Based Spectrum Criteria

TEC Criteria can be further improved when gains due to spectral efficiency innovations are included

Estimated BTS configuration with Capacity

Allocated Spectrum

6.2MHz 8MHz 10MHz 12.4MHz4.4MHz

S444S566S778

S332

Sync N/WDFCA

6 sectorAMR

SAIC Femto Cell

IBSNo. of subs

per site

Metro / Circle Morphology Distribution as per Satellite Image (Km²)

U SU RUDU

USURU

DUx %y %z %

w %

BTS Utilization per Morphology

Target Subs as per

Recommendations

Metro D & M

Metro K & C

Class A Circle

Class B Circle

Class C Circle

Sub Density Ratio

U SU RUDUTraffic Distribution

Required No. of sites & Estimated

Subs per Morphology

Inter-Site distance per morphology.

Subs Density

No

Yes

7 Key Technology Innovations

Excluded by TECwhile framing Subscriber based Criteria policy

Source: TEC “Presentation on Spectrum Efficiency. Dtd 20.09.07”

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Spectral Efficiency Innovations

India can’t afford to ignore use of these innovations

1. Synchronized Network

2. DFCA (Dynamic Frequency & Channel Allocation)

3. 6 Sector BTS

4. AMR (Adaptive Multi Rate)

5. SAIC (Single Antenna Interference Cancellation)

6. Femto cell solution

7. In Building Solution

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Technology Innovation - 1

Synchronized Network

Enhances Radio Network Capacity by 20%.Pre-requisite to use features like DFCA for further capacity gains.

BTS are synchronized using GPS or software.

TDMA Bit Offset of BTSs are aligned with each other.

Improvement of C/I by 3~5dB.

25 26

BTS 1

BTS 2

25 26

BTS 1

BTS 2

Asynchronous Network

Synchronous Network

Source: Huawei ,Ericsson and Nokia-Siemens

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Conventional Frequency and Channel Allocation Dynamic Frequency and Channel Allocation

Technology Innovation - 2DFCA (Dynamic Frequency & Channel Allocation)

Source: Huawei and Nokia-Siemens

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1 0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1

F2 F2

F3 F3

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1 0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1

F2 F2

F3 F3

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1

0

1

2

3

4

5

6

7

F1

F2 F2

F3 F3

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1

0

1

2

3

4

5

6

7

F1

F2 F2

F3 F3

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

F1

F2 F2

F3 F3

Enhances Radio Network Capacity by 60 ~ 90%.

Parameter Conventional DFCA

Frequency Collision Possibilities

Yes No

Synchronization required No Yes

Co and Adjacent frequencies reuse in Adjacent Cell

Not possible Possible

Frequency Hopping Fixed patternDyanacmic based on mobile

location

ThruSoftwareupgrade

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6

102

124

8

9

102

6

124

8

113

7

102

6

124

8

91

5

113

7

102

6

124

8

91

5

113

7

1

5

113

7

91

5

51

5

191

9

1

7

7

311

3

6

6

2

8

8

411

10

2

10

4

1212

51

5

191

9

1

7

7

311

3

6

6

2

8

8

411

10

2

10

4

1212

51

5

191

9

1

7

7

311

3

6

6

2

8

8

411

10

2

10

4

1212

51

5

191

9

1

7

7

311

3

6

6

2

8

8

411

10

2

10

4

1212

3 Sector BTS

6 Sector BTS

6 sector BTS provides twice the capacity of 3 sector BTS at same spectrum.

Improvement due to use of Asymmetric antenna which have more then 30dB front to back ratio for 1800 azimuth.

Source: Ten XC, Canada

Technology Innovation – 3 6 Sector BTS

TRx (No)

Traffic (Erlang)

TRx (No)

Traffic (Erlang)

4.4 3 45 3 89 100%

6.2 4 66 4 131 100%

8 7 129 6 245 90%

10 8 149 8 298 100%

3 SectorSpectrum

(MHz)

6 Sector Capacity incerase

(%)

Enhances Radio Network Capacity between 90% to 100%.

Reliance CDMA has over 200 six sector sites operational & in Reliance GSM network at Guwahati.

Vodafone has in Hyderabad.

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Technology Innovation – 4Adaptive Modulation Rate (AMR)

All handsets manufactured since 2003 are AMR enabled.

AMR penetration level of 60% has resulted in 70% increase in capacity. Soon to increase to 100%

60-75% of current traffic is generated by AMR enabled handsets.

Over 110 Mn AMR enabled handsets are in use

AMR Penetration & Capacity Increase

Source: GSM,GPRS AND EDGE PERFORMANCE by Halonen,Romero,Melero of Nokia (John Wiley & Sons)

100% AMR penetration will result in nearly 150% Radio Network capacity increase at zero cost – expected by 2009

TCH FER Based Capacity Gain

0

20

40

60

80

100

120

140

160

0 25 50 75 100

AMR Penetration [%]

Cap

acity

Gai

n [%

]

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Technology Innovation – 5Single Antenna Interference Cancellation (SAIC)

SAIC is a software feature in the handset for increasing downlink spectrum efficiency of GSM networks.

SAIC uses technique to cancel or suppress interference by means of signal processing without using multiple antenna.

Provides 50 ~ 60% additional capacity gain with 100% penetration of SAIC mobiles at no cost

Source: Nokia-Siemens and 3GPP TR 45.903 V7.0.1 (2007-08)

SAIC Penetration & Capacity Increase SAIC Handsets are available in

market from 2004

Majority of Nokia phones are SAIC compatible. Nokia market share is ~ 70%

Ultra Low end handset

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Technology Innovation – 6Femto Cells

Backhaul: ADSL, Ethernet

GSM

FEMTO cells improves spectral efficiency by release of BTS capacity for outdoor use.

Small form factor and affordable price point will ensure mass deployment

Size ~ 200 x 140 x 40 mm, 0.2kg

Small Form Factor

Source: Ericsson & ABI-Research

Over 100 Million Femto cells are projected by 2011

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Antenna

Splitter / Coupler

RF Feeder

Splitter / Coupler

Base Station

Technology Innovation – 7In Building Solutions

As per TRAI survey 70% calls in a cellular network are from In Building

Seamless indoor and outdoor coverage

In building coverage generates traffic and revenue

In Building solutions help in offloading the traffic from outdoor base stations

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Technology Innovation Summary

Capacity increases by 7 times by using 4 of the Technology innovation.

Further improvements feasible on use of 6-sector, Femto & IBS.

1. Synchronized Network: Improves capacity by 20%

2. DFCA (Dynamic Frequency and Channel Allocation): Enhances Capacity by 60 ~ 90%.

3. 6 Sector*: Enhances capacity up to 100%

4. AMR: 100% AMR mobile penetration will improve the network capacity by 150%.

5. SAIC (Single Antenna Interference Cancellation): SAIC improves capacity by 50 ~ 60%.

6. Femto Cell*: Unlimited capacity for SOHO segment.

7. In Building Solutions*: Offloads traffic from outdoor BTS

Source: Nokia-Siemens and 3GPP TR 45.903 V7.0.1 (2007-08)

* 100 % SAIC and AMR considered with Synchronous network

Basic GSM

AMR*

DFCA

SAIC/SN*

* At Zerocost

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Technology InnovationDeployment Status in India

Innovative techniques grossly under-deployed in Indian market.

Techniques Techniques Techniques Techniques

All OPERATORS

Synthesized Frequency Hopping (SFH)

Tighter Frequency Reuse Plan (TFR) Discontinuous Transmission (DTX) Dynamic Power Control IBS & Micro Cell Dynamic SDCCH

Under Trial Stage

ConventioConventional nal

ConventioConventional nal

Advanced Advanced Advanced Advanced

Innovative Innovative Innovative Innovative

Used by Used by Used by Used by

Synchronized Network Dynamic Frequency and Channel Allocation

(DFCA) 6 Sector BTS Single Antenna Interference Cancellation (SAIC) Interference Rejection Combining (IRC) Femto Cell

Intelligent Directed Retry (IDR) AMR-HR Antenna Hopping - One Operator

5 OPERATORS

Source: COAI submission to TRAI and from various GSM vendors.

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0.0

5.0

10.0

15.0

20.0

4.4 6.2 8 10 12.4

Spectrum Allocation (in MHz)

Su

bs C

ap

acit

y (

in M

n)

TEC

30% AMR-HR

Technology Innovations

30% AMR-HRTechnology innovation

4.4 1,500 538 1.40 3.0

6.2 2,000 466 1.36 3.0

8 2,400 426 1.37 2.8

10 2,509 416 1.36 2.6

12.4 2,560 412 1.34 2.6

Spectrum Allocation

(MHz)

No. of Times Subscriber Capacity w.r.t TEC No. of

Sites

Site to Site distance (in Mtr.)

Morphology & traffic distribution as outlined by TEC.

Technology innovations like Femto & IBS not considered in mathematical modeling.

TEC Criteria can be enhanced by over 3 times using Technology innovation

Increase in TEC Subscriber criteria Due to technology Innovations

GSM Case study for Delhi

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Technology Innovations - CDMA

New Techniques which will improve the spectral efficiency.

1. 6 Sector BTS

2. 4 GV vocoder

3. Pilot interference cancellation

4. Femto cell solution

5. In Building Solution

CDMA operators should accelerate deployment

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Capacity of CDMA for 2.5MHz spectrum is 6 times than that projected by TRAI

Similar observation is for other allocations.

0.00

5.00

10.00

15.00

20.00

25.00

2.5 3.75 5 6.25


Su

bs C

ap

acit

y (

in M

n)

RCOM Estimate

4GV Vocoder

Innovation Techniques

TRAI Criteria can be enhanced by more than 5 ~6 times using Technology innovation

Increase in TRAI Subscriber criteria (CDMA)Due to technology Innovations – Case study for Delhi

4GV Vocoder


4GV Vocoder


2.5 0.5 1.6 3.1 3.2 6.2

3.75 2.0 7.1 13.7 3.6 6.9

5 3.0 9.5 18.3 3.2 6.1

6.25 5.0 11.8 29.0 2.4 5.8

Spectrum Allocation

(MHz)

TRAI Criteria

Subscriber Nos.( in Mn)

No. of times w.r.tTRAI Criteria

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Summary - TEC subscriber criteria

The TEC criteria is liberal

It can be further increased with gains by use of spectral efficiency technology innovations

TEC subscriber criteria to be revised upward by over 3 times leading to increased availability of spectrum

Re-farming, re-alignment of spectrum and Capital efficiency measures

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900 MHz Vs1800 MHz Spectrum –Anomaly & imbalances

For a new operator, initial National Coverage with 900 MHz spectrum can be achieved with 30,000 BTS sites as against 60,000 BTS sites of 1800 MHz

Initial Capex saving of Rs. 15,000 Cr

Opex saving of Rs.1500 Cr per Year

On ongoing basis a 900 Mhz network provides Capex advantage of Rs. 3,000 Cr & annual Opex savings of Rs. 300 Cr as compared to 1800 MHz network

Spectrum beyond 4.4 MHz in 900 MHz band does not give any additional advantage

Cap of 4.4 MHz to be introduced in 900 MHz band

Spectrum in 900 MHz Band should be re-farmed & equally allocated to existing as well as new Operators

Airtel Hutch Idea RTLDelhi 8 8 6.2Mumbai 8Chennai 6.2Kolkata 6.2 6.2AP 7.8 6.2Gujarat 7.8 6.2Karnataka 7.8Maharashtra 6.2 7.8TN 6.2Haryana 6.2 6.2Kerala 6.2 6.2MP 6.2 6.2Punjab 6.2Rajasthan 6.2 6.2UP (E) 6.2 6.2UP (W) 6.2 6.2 6.2WB 4.4 4.4 6.2Assam 6.2Bihar 6.2 6.2HP 6.2 4.4J&K 4.4NE 4.4 4.4Orissa 6.2 6.2

Spectrum in 900 MHz

Existing GSM Operators with up to 8 MHz spectrum in 900 MHz bad have an unfair advantage over new entrants

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Re-farming spectrumInter-se 900 MHz– 1800 MHz

Both existing and new operators as per policy are to be given level playing field in non-discriminatory manner

This necessitates correction of current anomaly and imbalance of allocated spectrum in 900 &1800 MHz

Need to cap allocation of spectrum in 900 MHz to each operator – both existing and new entrants

Internationally re-farming has been implemented

Policy framework to be implemented to achieve non discriminatory level playing field for all operators

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Internationally, Regulators have re-farmed spectrum to ensure non discriminatory level playing field & consumer benefits

In October 2007 Ofcom has initiated the re-farming of 15 MHz to 20 MHz of spectrum in 900 MHz band from Vodafone & O2. This spectrum was allocated in 1985

Returned Spectrum will be allocated to new / other eligible operators Value of returned spectrum estimated at Rs. 50000 Cr (£ 6 Bn)

UK

Re-farming inter-se operators is practiced and implemented . In 2004, Regulator directed spectrum re-farming between AT&T & T-

Mobile in New York & California statesUSA

Global practices of re-farming of spectrum

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870.03 871.26 872.26 873.99 875.22 876.45 877.95 879.18 880.41 881.64 883.67 MHz – 890 MHz

869 MHz

BSNL TATA RCOM GB

1.4 MHz

GBGB

879 MHz 890 MHz

6.33 MHz

Realignment of Spectrum – 4 Carrier Scenario

871.26 881.21 MHz – 890 MHz

869 MHz 879 MHz

870.03 872.26 873.99 875.22 876.72 877.95 879.18

BSNL TATA RCOM GB

1.4 MHz

GBGB

890 MHz

8.80 MHz

Realignment of Spectrum – 3 Carrier Scenario

Note: All the frequencies are in MHz

RCOM & TATA’s to also offer GSM, Realignment will Improve availability of spectrum

Realignment of spectrum880 – 890 MHz Band

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Capital Efficiency Measures recommended

Mandate passive infrastructure sharing with price cap TRAI recommendations of Apr 2007 on sharing of active infrastructure

to be accepted & implemented DOT to make reference to TRAI for sharing of spectrum

Internationally active infrastructure sharing & spectrum sharing is done to deploy network in rural areas to reduce CAPEX,

DOT to make reference to TRAI Mandate Inter & Intra circle roaming in GSM and CDMA

These measures will be in further overall interest of consumers

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Summary – Re-farming & Capital Efficiency measures

Inter-se re-farming of spectrum in 900 & 1800 MHz bands. Realignment within 800 MHz band To improve capital productivity, capital efficiency measure such as

Sharing of passive and active infrastructure and spectrum sharing

Win-Win-Win for all stake holders – Customers, Government & Operators

Improves availability of spectrumOptimum utilization of spectrum

Promotes qualityAccelerates with increased competition

Achieves capital productivity

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Summary - Recommendations

Reliance fully supports TEC criteria for spectrum allocation TEC criteria should be the base & further tightened Start up spectrum of 6.2 MHz to be allocated to all new GSM entrants Refund of excess spectrum by the existing operators as determined by TEC

and beyond contracted 6.2 MHz Inter-se re-farming of spectrum in 900 & 1800 MHz bands Allocate maximum 4.4 MHz of spectrum in 900 MHz band to all existing

operators & new entrants. Realign spectrum within 800 MHz band to increase the availability of

spectrum for GSM for RCOM & TATA’s Annual spectrum charges should be increased at least to the level

recommended by TRAI to ensure efficient use of spectrum – scarce resource. Mandate passive infrastructure sharing Accept TRAI recommendation on active infrastructure sharing. DOT to make reference to TRAI for sharing of spectrum and Mandate Inter &

Intra circle roaming in GSM and CDMA

Thank You

Back Up Slides

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RCOM estimation on TEC Subscriber Criterion’s Calculation Process - Delhi Case study

Various deliverables as outlined in the workflow diagram of TEC recommendation

MorphologyArea

(in Km²)

Traffic Density

(w.r.t. DU)

Traffic Ratio (Area * Traffic

Density)

Sites Distribution

(in %)No. of Sites

Subs Capacity (in Mn)

Resulting cell range

(Km)

Intersite Distance (Km)

Subs density (Per

Km²)

Dense Urban 37.7 100% 12% 10% 235 0.43 0.29 0.430 11517

Urban 188.3 40% 24% 20% 470 0.77 0.45 0.680 4095

Sub Urban 753.2 12% 29% 40% 940 1.35 0.64 0.962 1792

Rural 903.8 12% 35% 30% 705 0.58 0.81 1.216 640

Total 1883 100% 100% 2,350 3.13 0.55 0.823 1664

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Spectral Efficiency in Cellular network

Spectral EfficiencyBenefits

2. Maintain desirable QoS for the growing Network.

4. Avoid site acquisition related delays for capacity built-up.

3. Optimized Capex & Opex due to addition of new sites.

1. Address the capacity demand with available spectrum

Spectrum efficiency techniques should be implemented voluntarily by the operators rather then being enforced by Regulatory Authority .

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KPI Asynchronous Synchronous DFCA

Effective Frequency Load 12% 16% 21%

Total max Traffic/sector 68.5 90.9 113

Capacity Gain wrt AsynchronousNetwork

-NA- 33% 65%

Source: Nokia-Siemens

Technology Innovation – 2 (Cont.)DFCA (Dynamic Frequency and Channel Allocation)

Commercial Deployment: Key operators who have implemented DFCA commercial network.

T-Mobile (USA), AT&T (USA) Conecell (Ecuador) China Mobile Telefonica (Columbia)

Typical improvement statistics shown in table. (Huston)

In live commercial network capacity enhancement of 65% observed.

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Capacity of CDMA for 2.5MHz spectrum is 6 times than that projected by TRAI

Similar observation is for other allocations.

0.00

5.00

10.00

15.00

20.00

25.00

2.5 3.75 5 6.25


Su

bs C

ap

acit

y (

in M

n)

RCOM Estimate

4GV Vocoder


TRAI Criteria can be enhanced by more than 5 ~6 times using Technology innovation

Increase in TRAI Subscriber criteria (CDMA)Due to technology Innovations – Case study for Delhi

4GV Vocoder


4GV Vocoder


2.5 0.5 1.6 3.1 3.2 6.2

3.75 2.0 7.1 13.7 3.6 6.9

5 3.0 9.5 18.3 3.2 6.1

6.25 5.0 11.8 29.0 2.4 5.8

Spectrum Allocation

(MHz)

TRAI Criteria

Subscriber Nos.( in Mn)

No. of times w.r.tTRAI Criteria

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Peak Configuration: S2/2/2

25 Erlang /site

Peak configuration:S3/3/3 99 Erlang/site

Uplink/downlink DTX

Uplink frequency scan

Uplink interference band measurement

Dynamic power control

Frequency hopping

Dynamic MAIO

Tight BCCH Reuse

AMR FR/HR

Antenna hopping

SAIC

Synchronized Network

DFCA

AMR 100%

Interference Counteract Combining

Repeated FACCH /SACCH

Advanced Power control

StandardStandard20012001

StandardStandard20012001

AdvancedAdvanced20072007

AdvancedAdvanced20072007

Innovative Innovative Q2 2008Q2 2008

Innovative Innovative Q2 2008Q2 2008

Peak configuration:S4/4/4

143 Erlang/site

Technology Innovation Application on 4.4MHz

6times capacity improvement in 4.4MHz band.

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International Case Study- Re-farming spectrum to reduce from 20MHz to 10MHz

Re-farming of the Spectrum can be implemented seamlessly

Source: T-Mobile, USA

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2/2/2 4/4/4 6/6/6 8/8/8 10/10/10 12/12/12

BTS Configuration

No

of

Sit

es

No of Sites in 20MHz No of Sites in 10MHz

BTS configuration not applicable for

10MHz.

T-Mobile (NY) was serving

3 million subs using 20 MHz .

10 MHz be surrendered

owing to contractual obligations

T-Mobile had no option but

to opt for innovative techniques

to support the growing subscriber

base.Solutions Implemented :

100% AMR-HR introductionIntroduction of Synchronized NetworkSAIC

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900 band spectrum advantages over 1800 band Spectrum

Higher Range : (Better Coverage) ‘Lower the radio frequency, higher the transmission range’ Achievable by GSM 900 cell is double of GSM 900 cell1

Less no. of Sites: (Substantial reduction in Capex) For equivalent coverage, site requirement with GSM 1800 is 4 times of GSM

9002.

Better Indoor coverage: (Improve QoS) much better in 900 Mhz than 1800 Mhz , to provide equivalent levels of deep,

dense urban coverage, more cells are required at 1800 MHz than at 900 MHz1

Better Operation at high speed1: (Improve QoS) The specifications for GSM 900 and GSM 1800 include an upper ‘speed limit’

for the handset, above which the radio connection is not guaranteed. For GSM 900 this is 250km/h, and for GSM 1800, 125km/h.

1. OFTEL

2. Denmark Regulator

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Spectrum charges

It is almost impossible for regulation to keep pace with technology advancement

In addition to appropriate spectrum allocation criteria, there is need for mechanism to ensure efficient spectrum utilization on ongoing basis.

Current recurring spectrum charges as well spectrum charges recommended by TRAI have lower per MHz charges beyond 8 MHz

Spectrum charges for 900 MHz band spectrum should be 20% higher than charges for 1800 band spectrum

Spectrum in MHz 4.4 6.2 8 10 12.4 15Existing Charges 2% 3% 4% 4% 5% 6%Charge/MHz 0.45% 0.48% 0.50% 0.40% 0.40% 0.40%

TRAI Recommended 2% 3% 4% 5% 6% 7%Charge/MHz 0.45% 0.48% 0.50% 0.50% 0.48% 0.47%

Proposed 2.0% 3.0% 8.0% 10.0% 12.4% 15.0%Charge/MHz 0.45% 0.48% 1.00% 1.00% 1.00% 1.00%

Documents

2 Reliance