(I am placing below the gist of my study on the
TRAI’s consultation paper dated 7-3-2012 on the issue of auction of the
spectrum as per the Supreme Court’s judgment. The said auction has a profound
implication for BSNL. I think that a stage has arisen wherein those interested
in safe guarding the Public Sector must utilize the opportunity to start a
serious battle for saving BSNL. For this purpose, ideological struggle as well
as class struggle are necessary. The gist of my study on the consultation paper
is not a well structured or well written one and still in a raw stage. However
in view of the urgency of the point to be made known, I am submitting this
study for the information of the readers---p.asokababu)
Background
a)
Mobile
services were started in 1994 by the private operators. Initially two operators
were allowed in the 4 metros by granting the license on the basis of a “beauty
contest”. In the next phase, on the basis of competitive bidding, 14 licenses
were issued in private sector. In 1999 the DoT/MTNL were allowed as the 3rd
cellular operator in the metros and circles. The licenses of MTNL and BSNL became
effective from 29-1-2000. Licenses for the 4th Cellular Operator
were issued in 2001 on the basis of competitive bidding and the price of the
pan India license was Rs 1658 crore. In 2008 A.Raja issued licenses on the
basis of FCFS(First Come First served)
principle without any competitive bidding at the value of the 2001
price. These 122 licenses were cancelled by the Supreme Court terming the FCFS
principle as arbitrary. But there are some more licenses issued between 2003 to
2008 on the basis of the same FCFS principle, but they were not cancelled by
the Supreme Court since they were not questioned before it. The Supreme Court
directed the TRAI to make recommendation for grant of license and allocation of
spectrum in 2G band in 22 service areas by auction as was done in case
allocation of 3G band and directed the Government to decide for the auction of
spectrum and allocation of the licenses on that basis.
b)
The
TRAI issued a pre-consultation paper on 3-2-2012 asking for the views of the
stake holders. All the telecom companies except MTNL, but including BSNL have
responded. Thereafter the TRAI issued the consultation paper on 7-3-2011
seeking the views of the stake holders on it by 21-3-2012.
c)
In
its response to the pre-consultation paper, BSNL demanded for allowing
trading/leasing/sharing of spectrum, which is normally against the principle to
be followed by a PSU. What is the reason and should we oppose it or support it,
is the question. To understand this, we have to understand the history of the
allocation of the spectrum in various bands to the mobile service companies.
Allocation of Spectrum-quantity and quality
a)
The
spectrum for 2G services was allotted in 900 MHz band and 1800 MHz band for GSM
technology and in 800 MHz band for CDMA
technology. At first the spectrum for GSM was allotted in 900 MHz band and the
earlier licensees including BSNL and MTNL got it. Since the spectrum in 900 MHz
band was exhausted for allotment, further allotments to the later licensees was
done in 1800 MHz band.
b)
The
spectrum for 3G services was allotted in 2.1 GHz band and the BWA spectrum was
allotted in 2.3 and 2.5 MHz band. The 3G and BWA are advanced technologies
providing for high speed data transfer.
c)
The
issue now is about the getting back of the 2G spectrum allotted to the 122
licensees cancelled by the Supreme Court and its auction, keeping in view the
constitutional principles of equality, efficiency and public benefit,
competition etc. How to do this? That is the question for the consultation. But
to answer this question, so many issues have to be taken into consideration.
d)
To
observe the principle of equality, it has to be considered in quantity and
quality. What is the amount of spectrum available for the auction and who have
to be allowed in the auction, how to ensure equality in the quality of the
spectrum allotted to all the operators etc.
BSNL’s problem-famine amidst plenty
e)
Quantity
wise, BSNL is the topmost company in holding the spectrum. The initial
allotment of the spectrum (2G) to a company was 4.4 MHz for GSM. The contracted
allotment was for 6.2 MHz. There are companies having the spectrum more than
this contracted amount and companies having less than this contracted amount.
If the spectrum over and above the contractual spectrum of 6.2 MHz per circle
is counted, BSNL is having a total excess spectrum of 63.4 MHz whereas Airtel
is having 31.8 MHz excess spectrum and others are having still less excess
spectrum.
f)
Quality
wise also, BSNL is in an advantageous position along with MTNL and one or two
private operators. The spectrum in 900 MHz band originally allotted for 2G
services can be now utilized for 3G services also due to technological
developments, but the license condition is not permitting it since it was
allotted for 2G services only. BSNL is having 6.2 MHz spectrum in almost all
circles and similarly MTNL is having 6.2 MHz quantity spectrum in 900 MHz band
in each of the Delhi and Mumbai Circles. Only Airtel in several circles and one
or two private operators in a few circles are having such a quantity of 900 MHz
band spectrum.
g)
Therefore
a question has arisen regarding spectrum liberalization i.e., allowing the
operators to use the 900 MHz band spectrum also for 3G and other advanced
services. The point for the consultation is when this liberalization has to be
done? Before the commencement of the auction or after the completion of the
auction? But if the liberalization has to be allowed with equality, all the
companies should have the 900 MHz band spectrum or any other band equally
efficient for providing advanced services. But there is no spare 900 MHz
spectrum available to allot to the companies that will now participate in the
auction. The alternative is to allot the 700 MHz band spectrum (not yet
allotted to any operator) to the new operators barring the existing operators
having the 900 MHz spectrum from the auction. But in such case the new
operators have to pay a higher amount in the bid for the efficient 700 MHz band
spectrum where as the existing operator like BSNL, Airtel etc having 900 MHz
spectrum are not paying anything even though the 900 MHz band can be utilized
for advanced broad band wireless services after liberalization.
h)
TRAI
in its earlier recommendation suggested that the holders of the 900 MHz band
spectrum have to pay additional amount since its quality is upgraded. This
means the BSNL is having a considerable quantity (6.2 MHz in each circle) of
the quality 900 MHz band spectrum and hence has to pay a heavy amount, may be
in thousands of crores again, for the spectrum already held by it. Since the
Government earlier not allowed it to procure equipment for the expansion of its
2G services and since now it is not having the capital to procure the equipment
that may be required for the up gradation of the 900 MHz quality band spectrum
it has for providing the advanced services, it has proposed for the
trading/leasing/sharing of this spectrum. This reflects the bankruptcy of the
Government’s policies in not allowing the BSNL to procure the equipment in time
and allowing the precious spectrum allotted to be wasted and the management’s
incapacity to make the best use of the quality spectrum available for expanding
the services. Such allowing of the
precious natural resource to waste is against the Supreme Court’s judgment
directing the State to see that the natural resources are efficiently utilized
for the benefit of the people.
i)
Another
big question for the consultation is that who should be allowed to participate
in the auction for the spectrum now, based on the recommendations to be given
by TRAI and decisions to be taken by the DoT on that basis? The operators whose
licenses are cancelled are demanding that only they should be allowed to
participate in the auction in order to encourage competition. They are
demanding that for the start up spectrum of 4.4 MHz/6.2 MHz only they should be
allowed since all the existing operators are having this startup/contractual
spectrum. They are saying that if the incumbents are allowed, they will have
more advantage with established network and hence will bid aggressively and
will eliminate them thereby reducing competition. Hence according to them, the
incumbent operators should not be allowed in the first stage of the bidding for
the initial/startup/contractual spectrum. But the incumbent operators like
Airtel, Vodafone etc are arguing that they should be allowed in the auction
since more competition in the auction will result in more money to the
Government and in case only the cancelled licensees are allowed excluding them,
it will result in less demand and more supply for the spectrum thereby
resulting in nominal price to the spectrum auctioned. Both are right regarding
their point. But the situation is not a welcome situation. To avoid monopoly,
competition has to be encouraged and to encourage competition, the
participation in the auction has to be restricted to the cancelled licensees.
But it will result in loss of revenue to the Government since due to restricted
participation, the price of the spectrum would be less. But in case all are to be
allowed, it will result in higher price for the spectrum in the auction and
hence higher revenue to the Government, but it will result in monopoly and
anti-competitive situation resulting in higher tariffs to the subscribers. The
result is either the revenue to the exchequer has to be sacrificed or the
subscriber has to be taxed.
j)
Real solution
From the above discussion it is clear that the
privatization resulted in so many problems regarding the allotment of the
precious natural resource spectrum. It is also very clear that the equitable
distribution of the spectrum to the private operators with benefit to the
exchequer and to the subscriber is not possible due to various reasons. Hence
the real solution is that the state should own and utilize the natural resource
for the benefit of the people, that is the telecom services sector should be
nationalized and effectively maintained so that the benefits of technological
evolution are passed over to the subscribers without any controversy. Pending
this, the PSUs should be immediately allowed to utilize the spectrum available
with them fully, in quantity as well as in quantity, by allowing them to
provide advanced services using the 900 MHz spectrum and 3G spectrum and for
this purpose they should be allowed to procure the required equipment
expeditiously. Such liberalization of the use of spectrum only for the PSUs is
not against the Supreme Court’s judgment for equality among the operators since
such principle of equality has to be applied between the private operators only
and it cannot prevent the state and its instrumentalities from utilizing the
natural resource for the public benefit.
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కామెంట్ను పోస్ట్ చేయండి