Managing Public Policy

analyzing policy issue on

3G SPECTRUM SHARING in INDIA

3G Spectrum sharing

A three step analysis process

Policy Policy Issues ?Issues ?

Policy Policy

optionsoptions

ImplemeImpleme

ntation ntation PlanPlan

POLICY ISSUE

3G Spectrum sharing by telco’s should be allowed or not? A policy dilemma for regulator

Policy issue : explanation and brief background

Telecom Service ProviderFour leading telecom firms - Bharti, Vodafone, Idea, and Tatas - have joined hands to defend their 3G spectrum sharing

Under which they would be able to offer 3G services in circles where one of them does not have spectrum, but one of the other does

Government and RegulatorExamining the legality of agreements, UASL (unified access service licence) licensee cannot offer 3G services, declare a tariff plan or acquire customers in a circle it hasn't been allocated 3G spectrum

Mobile virtual network operators (MVNO) is not be allowed for 3G

Maximum 4 Operator’s in a circle are allowed for 3G Service including one state owned entity (BSNL now has to face competition due to upto 6 players in a circle post pacts)

Unfair competition to those who don’t have 3G Spectrum as they don’t have any bait to offer for such pact

Let consumer decide which operator to choose through Mobile Number Portability

Wha

t is

at s

take

?# Impact Item Degree of

Impact (1 to 5, low to severe)

Consumer

1] Service Quality and Price 2

Telecom Service Provider

2] Revenue thru additional subscriber 3

3] Synergistic Cost efficiencies 3

4] Additional revenue thru lease of spectrum 3

Government or Regulator

5] FDI, Negative impact on investor sentiment 1

6] Additional Revenue opportunity (% of revenue annually) 2

7] Efficient spectrum utilization and promoting broadband penetration

2

Telco’s justification"The UASL licences clearly permit the operators to provide "all types of access services". Indisputably, 2G, 3G, 4G are all merely different technologies for access services -- all permissible in our technology-neutral UASL environment,"

POLICY OPTION

Allow spectrum sharingStatus Quo

Evaluation…

If allowed, economic, political and technological (business facilitator ) cost benefit analysis indicates – Undue advantage to few players, violation of spirit of law which were clearly spelled during bidding and award of spectrum. Govt. role to ensure provision of level playing field to other industry player can be diluted

Overall not in favor of majority of the stakeholder’s on long-run

On contrary, regulator should clarify the misinterpretation of the rules by handful of service provider’s and can take appropriate permissible actions to safeguard the interest of majority of the stakeholders

POLICY IMPLEMENTATION PLAN

1.Issuance of clarification2.Conflict resolution through TDSATwithin next 1 month

A presentation byKarthik RajgopalMadhur GopalAnurag Gupta