The much-awaited recommendations of the Telecom Regulatory Authority of India (TRAI) on spectrum-related issues have been released. Two key issues have been kept in mind while formulating these recommendations. The first is the government's objective of achieving a target of 200 million mobile subscribers (GSM and CDMA) by 2007 and ensuring rollout of 3G services. The second is that the availability of spectrum is limited and its allocation should be need based.

Allocation of spectrum
At present, mobile operators in India are using spectrum ranging from 2x4.4 MHz to 2x10 MHz for GSM operators and 2x2.5 MHz to 2x5 MHz for CDMA operators, which is far below the international average for both types of operators.

For operators to meet the requirements of their increasing subscriber base, TRAI has suggested the following spectrum allocation pattern:

For CDMA operators
Currently, spectrum allocation to CDMA operators is 2x2.5 to 2x5 MHz compared to the international average of 2x14 MHz. To increase availability, TRAI has recommended the allocation of available carriers in the 800 MHz band to these operators. It has also recommended that CDMA operators be allocated additional spectrum in 450 MHz band as and when there is demand.

The regulator feels that in a longer time frame, demand and availability for the 1800 MHz band for CDMA equipment will also materialise. At such a point, and as and when additional spectrum is available in 1800 MHz band, this should also be allocated to CDMA operators on their request. This allocation can only be done at a later date as at present there is a problem of availability of dual/multi-band handsets in the 800 MHz/450 MHz/1800 MHz bands.

For GSM operators
The spectrum allocation that has been made for GSM operators is inadequate to meet their demands and in comparison to the international averages of 2x20 MHz, the Indian operators have only been allotted 2x4.4 to 2x10 MHz.

To meet their needs, TRAI has recommended that when the 2x4.8 MHz spectrum in 900 MHz band is vacated by the defence services, a part of it should be allocated to those GSM operators who have been allocated only 1800 MHz band. This will allow the operators to improve coverage in semi-urban and rural areas.

TRAI has recommended a time-bound programme to be drawn up to make available additional spectrum in the 1800 MHz band no later than December 2006. It is expected that 2x25 MHz of spectrum will be vacated in the 1800 MHz band by 2006. In the long run, the entire 1800 MHz band may need to be vacated, depending on the need at the time.

Allocation of IMT-2000 spectrum
The shortage of available 2G spectrum and the difficulty in its release in the short run has prompted TRAI to consider the allocation of other bands of spectrum. Therefore, TRAI has suggested the allocation of additional spectrum in the IMT-2000 band. The regulator feels this band should be made available to both GSM and CDMA operators. Each existing operator who demands this spectrum will be granted 2x5 MHz in the IMT-2000 2GHz band.

This band was chosen for a number of reasons. One, it was found that the defence services were unable to vacate the other alternative –­ the 1900 MHz USPCS band. Two, it is not desirable to allocate spectrum both in IMT-2000 2GHz band and 1900 MHz USPCS band due to interference issues. Three, the regulator felt that a shift by some 2G users to the IMt2000 band might create space in the 2G bands. This process would supplement the thrust to get more spectrum vacated in the 1800 MHz band. Thus, the regulator has suggested that 3G spectrum allocation to the existing operators be viewed as an extension of 2G spectrum allocations.

Competition and spectrum allocation
TRAI feels that with four to seven mobile operators, there is adequate competition in almost all the service areas. It has therefore recommended that before allocating spectrum to new service providers, it is necessary to ensure that the existing service providers have adequate spectrum.

Based on these considerations, it has recommended that the government should not keep the available spectrum with itself in service areas where there is adequate competition and should instead allot spectrum to operators, based on the revised spectrum allocation criteria.

Spectrum pricing
It is recommended that, as in the existing framework, spectrum charges should continue to have two components: a one-time spectrum charge and an annual charge.

For existing operators, there will be no one-time spectrum charge for allocation of IMT-2000 spectrum. For new entrants, the one-time spectrum charge will be equal to the UASL entry fee in that service area, minus the component of registration charge based on the entry fee paid by the new BSO. For new UASL operators, the one-time entry fee includes a one-time spectrum charge as well.

On the issue of annual spectrum charge, the existing method of annual spectrum charge in terms of percentage of revenue share should continue. However, the existing ceiling on annual spectrum Two key issues have been kept in mind while formulating the recommendations on spectrum: achieving a target of 200 million mobile subscribers by 2007 and need-based allocation. charges of 6 per cent of AGR should be brought down to 4 per cent of AGR.

Annual charges for IMT-2000 spectrum
The following annual spectrum charges have been proposed for IMT-2000 spectrum: To avoid hoarding, a minimum guarantee of spectrum charge is proposed to be collected from the operator until rollout of IMT-2000 services. In case the operator does not roll out these services within two years of the allocation of IMT-2000 spectrum, the allocation of IMT-2000 spectrum would be cancelled. This has been suggested as an incentive for service rollout and a disincentive for non-serious players.

Spectrum charges and allocation for other terrestrial wireless links

Allocation policy for CorDECT services
For CorDECT services, the spectrum allocated should be de-linked from the spectrum for cellular technologies like CDMA and GSM, according to TRAI. To promote the most efficient usage of the CorDECT platform, it suggests that the spectrum allocation for specific operators be altered from its current format and that seven carriers out of 11 be left open to be shared by all operators, with clearance to operate CorDECT equipment in their service area.

Policy for other terrestrial links
As far as terrestrial wireless links are concerned, TRAI has recommended a modification in the present system for acquiring and pricing of point-to-point and point-tomulti-point wireless links. This is because the slabs for determining the pricing multiples are too large and therefore do not reflect the full potential of wireless technology and the requirements of operational deployment. They also do not encourage efficient utilisation. The new proposed formula should rationalise and reduce costs, particularly for fixed wireless links over short distances helping to reduce costs for semi-urban and rural areas.

Other issues

Spectrum trading
The regulator feels spectrum trading cannot be permitted at this stage. However, depending upon market conditions, the issue may be considered at a later stage through a consultation process.

Spectrum management
TRAI feels that it may not be possible to manually manage spectrum in a multioperator high wireless growth environment. This is why the WPC has commissioned the automated spectrum management system (ASMS) for receiving online applications for frequency assignment as well as for SACFA clearance. TRAI recommends that the entire spectrum management process, including the frequency authorisation process, be fully automated in a time-bound manner.

Formation of monitoring group
To meet the targets set by the government for the sector and to address the difficulties faced by the defence services in vacating spectrum in such a short time, TRAI has recommended the immediate constitution of a group at the level of union ministers assisted by professionals from the defence services, Department of Telecommunications and TRAI to draw up a detailed time-bound, step-by-step programme and monitor its implementation.