India wants new spectrum, not 3G: Idea exec
India’s long-awaited 3G spectrum auction isn’t likely to boost mobile broadband’s growth rate any time soon, as the market isn’t ready and the winning bidders intend to use their spectrum for extra voice capacity.
Rajat Mukarji, chief corporate affairs officer for Idea Cellular, told telecomasia.net that Indian operators have the lowest amount of allocated 2G spectrum of anyone in the world – less than 8 MHz per operator – and are hungry for more regardless of its mobile data capabilities.
“Operators in India are starved for spectrum,” Mukarji said on the sidelines of the Mobile Asia Congress on Wednesday. “They see the upcoming auction as a 2100 MHz auction, not a 3G auction.”
After numerous delays, the government plans to auction four spots of 2 x 5 MHz blocks of 2100 MHz spectrum across 18 of its 22 service circles on January 14, 2010. The other four will only offer three spots, if at all, as the Indian military still controls the 2100 MHz band in those areas.
But the winning bidders are all planning to use their 2100 MHz spectrum initially as a voice overlay network for additional outdoor capacity, Mukarji said.
He added that even if cellcos wanted to offer 3G services right away, uptake wouldn’t be enough to justify the cost.
“3G handsets aren’t yet at the right price point, and PC penetration in India is so low that we would barely make a dent in the dongle market,” he said, pointing to the experience of EV-DO operators in the country who have launched dongle devices without success.
“Also, the applications aren’t really there either to justify 3G. Even the video streaming apps that we offer can be served with our EDGE network,” Mukarji said. “If we can do it on 2G, there’s no upside to 3G until we can do it at the same price points.”
The other problem is that 3G dongles are more likely to be used as nomadic rather than mobile devices – which raises 3G’s indoor coverage issues in the 2100 MHz band. Mukarji said that while Idea could legally refarm 3G for the 900 MHz band, it doesn’t have enough 900-MHz spectrum to support W-CDMA’s minimum 2 x 5 MHz channel requirements.
However, Mukarji did stress that while 2100 MHz will be used as a voice overlay to start with, both voice and non-voice services in general would continue to grow, and 3G data was definitely on the roadmap – someday.
“Indian operators have learned to be very innovative with our services with what we have, so once the capability is there and the devices are affordable enough, apps that make use of 3G’s bandwidth will come,” he said.
And all this is assuming the 2100 MHz auction isn’t held up by other snags. A pre-bid conference hosted by the government on Monday featured a noticeable absence of foreign players.
Meanwhile, many operators at that conference expressed concerns over the increasing “aberrations” in India’s National Telecom Policy that has caused regulator TRAI to revisit issues such as spectrum sharing, spectrum trading and license fees – none of which will be resolved before the auction, said Mukarji.
“It’s unfair to expect anyone to bid for 3G licenses when these things haven’t been decided,” he said.