GSM Operators: United They Fight

Barely two months ago, Reliance dropped its colossus CDMA plans in the Indian mobile space with a thud, and a scared lot of GSM players huddled together in defense. That was Reliance Impact 1.

Slowly, the dust started to settle down, and GSM players could see Reliance’s

movements more clearly. And they realized that the best way of survival was

offence–through a common front. And that’s the beginning of a new phenomenon–the

Great Unification of GSM Operators. Call it Reliance Impact 2.

When

there is a common opponent, smart fighters unite. Never has one seen the GSM

operators so closeted together. A sense of brotherhood has showed up in every

move they made since late 2002. They talk, write jointly to the minister. They

defy the regulator together. They fight their court cases together. They

communicate their anguish through a common advertisement. They cut their prices

together. They share their networks. They even address the media together.

This phenomenon is indeed remarkable, considering that as many as four

operators competing against each other in almost every circle and metro. It is a

fiercely competitive market. On one hand, cellular operators have to play the

game of one-upmanship among themselves and yet put in a common bat against the

big guy hurling the demon ball from the other side.

The cellular market in India has grown at the rate of 80—85 percent, and

achieved a subscriber base of 10.4 million by end-2002. According to Cellular

Operators Association of India (COAI), the industry has grown from Rs 3,285

crore in FY 2000-01 to Rs 4,700 crore in FY 2001-02.

But with Reliance having shot the CDMA arrow, will the fast-growing cellular

industry start slowing down? That, today, is the billion-dollar question.

The stakes are very high. COAI estimates that there will be 120 million

mobile subscribers in India by 2008. In the course, the mobile subscriber base

is expected to leave behind the fixed phone subscriber base. The mobile is not

only being looked as a means to solve the lack of teledensity but as an enabler

of an information society. That obviously points to not only a market for voice

communication but data/multimedia as well. Here, one is talking of a

billion-dollar industry, which is all set to grow at a fast pace.

So, the operators are doing everything in their capacity to hold their

customers from churning out to CDMA players. The challenge is huge and everybody

is affected. Unity has automatically followed as a result. Individually, they

present at best a few million subscribers each, but jointly they are a 10

million-strong team to contend with. United they stand, divided they fritter

away their advantages. They know this fact very well.

Thus, the united fight is very much on. The two major objectives here have

been to match and even preempt the opposite party’s moves both at the

marketplace as well as in the corridors of power. And the way things are going,

this strategy seems to have already paid back its first batch of dividends

through the Supreme Court direction and the TRAI tariff order.

Pricing

For cellular phone consumers, the year 2003 has truly started off on a

celebratory note. On the second day of the new year, GSM cellular operators

congregated to announce one of the most aggressive tariff revisions in the

history of the industry. With immediate effect, cellular-to-cellular national

long distance (NLD) calls of 50 km and above became cheaper by 66 percent, from

the prevailing peak charge of Rs 9 per minute to Rs 2.99 per minute anytime.

This was a joint initiative by the major cellular operators, which have been

using Bharti Televenture’s NLD service IndiaOne as the common carrier for

cell-to-cell NLD calls. Though the offer of such arrangement was made by

IndiaOne to all cellular operators, the two major incumbent telcos BSNL and MTNL

did not join this arrangement. And the two responded five days later, with an

even more aggressive cell-to-cell NLD tariff cut after joining hands for

cell-to-cell long distance. While MTNL’s calls beyond 200 km got marginally

cheaper at Rs 2.90 per minute (both peak and off-peak) compared to the private

operators’ Rs 2.99 calls between 50 km and 200 km and calls under 50 km became

significantly cheaper at Rs 2.40/1.20 (peak/off-peak) and Rs 1.20 (both peak and

off-peak) respectively. BSNL’s tariffs, which are current under introductory

plans and hence has to be revised, remained more or less at existing rates

(which are already lower than private operators tariffs), except for calls

beyond 500 km. For calls beyond 500 km, it announced a new flat tariff of Rs

4.80 per minute, inclusive of airtime. Further, there were price cuts also by

BSNL for cell-to-fixed NLD calls.

Cellcos will have to either quickly ramp up on the benefits side or match Reliance’s tariffs

What all this meant was no matter where you call from and where you call to

within the reach of the cellular signal, if you are making a call from a

cellular phone to another cellular phone, the national long distance call

tariffs have become almost three times cheaper than what the earlier tariffs.

As a result, roaming has become somewhat affordable, thus enabling more and

more people to remain always connected through a cellphone.

But there was more to come.



Two weeks later, after an intense war of words and action between private

cellular operators on one side and the Wireless in Local Loop (M) operators and

the incumbent fixed operators on the other side, cellular operators again upped

the ante. There was a joint statement that all cell-to-cell incoming calls

(within the same network or across networks) would become free.

Soon after came TRAI’s tariff order of 2003, directing basic service

operators to hike their local call charges and cellular operators to make all

incoming calls free, including calls from a fixed or WLL mobile phone. A new

interconnection regime has also been ordered, wherein basic service companies,

including those operating WLL mobile services, will pay interconnection charges

for using the cellular last mile–a long-standing demand of the GSM operators,

who have been paying interconnection charges for using the basic service

providers’ last mile.

As

expected, by the first week of February, all the major cellular operators have

made major overall tariff cuts. Incoming calls from GSM mobiles, across almost

all networks, have been made free, while incoming call charges from fixed phones

and WLL phones have been set at Rs 0.50 per minute. That apart, there has been

drastic fall in outgoing call charges too, with some premium packages even doing

away with outgoing airtime charge as well. Pulse period for calls has also

undergone a migration from the existing 30 seconds to a minute. Cellular

operators also promise to do away with the 50 paise charge for calls from fixed

and WLL phones, once the new interconnection regime comes into force.

The Reliance Factor



Cellular service providers have never been so forthcoming as they are now.

In the past, though tariffs have come down from the Rs 16 per minute levels of

1996, they have never cascaded so drastically–all at once. The difference

between now and then, obviously, is Reliance.

WLL mobile services have been there in the country for some time in the form

of MTNL’s Garuda. It was however, the entry of the big private sector

corporates Reliance and Tata into this service that set off the panic button in

the cellular services camp. Suddenly, the alternate mobile service threat was a

reality.

While the cellular operators see the entire WLL (M) industry as a threat, it

is Reliance which has really imprinted itself in their psyche. Yes, the Tatas

are big too. But it is the Mukesh Ambani-run Reliance Infocom whom they are

watching all the time. Why this profound impact?

Grandiose as Reliance’s product, distribution and promotion plans are, it

was its pricing strategy that shook up the industry in the initial phase. Going

from the price positioning that it has taken, the nimble giant seems to have

taken great care in evolving its pricing strategy.

While other WLL players have chosen to position themselves as cheaper mobile

phone services in terms of pricing, Reliance has positioning itself as the ‘cheaper

and as-good-as cellular’ mobile service. Unlike others, Reliance overtly

promotes such value-added features as inter-SDCA number facility, SMS,

multimedia services, Internet access, and games. The idea clearly is to be as

competitive as the GSM cellular operators when it comes to consumer benefits–real

or perceived.

The Value War



What we are witnessing today in the Indian mobile market is not exactly a

price war. It is in fact a value war that is throwing us all the goodies that

have come so far since the launch of WLL mobile services.

Value is nothing but benefits minus cost–not what the service provider

estimates but what the consumer perceives.

Therefore, the greater the perceived benefits and the lower the price of a

service, the higher is the customer value and more are the chances that

customers will choose that service.

The current mobile pricing strategy adopted by Indian mobile operators can be

explained in a simple manner by mapping the various players on a value map.

The horizontal axis of the value map shows the customer-perceived benefits of

the services offered while the vertical axis plots the price of the service as

perceived by the customer.

In a scenario where market shares are more or less stable, as was the case of

cellular industry, competitors align themselves in a straight diagonal line from

the point of origin, which is called value equivalence line (VEL). Depending on

what benefits the customer wants at what price, the customer makes a logical

choice. The consumer decides whether to choose a private cellco and pay a

premium for the better perceived benefits they provide or go for MTNL/BSNL to

enjoy the cheaper tariff.

WLL companies like Tata Indicom, BSNL, MTNL, HFCL, Shyam Telelink seem to be

clearly positioning their services truly as the poor man’s mobile, setting

their tariffs significantly lower than the cellular operators, right at the

bottom level of fixed phone services. They are mainly targeting the mass market.

They are betting on the hope that majority of new phone subscribers would choose

to take up a mobile phone rather than a fixed phone for their personal

communications. These companies, while being at the same price level as fixed

phone services, have an advantage on the perceived benefits due to the mobility

factor. Because of this, they hope to gain marketshare from the fixed phone

operators. Cellular operators are not that threatened by this group of players.

On the other hand, it is Reliance that is sending the shivers down the

cellcos’ spines. Reliances’ position is that of matching the fixed operators

on price and matching the cellular service providers on perceived benefits. Now,

that is the real cause of the incumbent mobile operators’ worries. If the

customer perception matches what Reliance has set forth to do in its

price-benefit mix, then it means that the company would capture marketshare from

not only the fixed phone operators but also the cellular service companies.

So either the cellcos have to quickly ramp up on the benefits side or match

Reliance’s tariff apple to apple. The catch-up activity has already begun on

the price side. How far they can go, however, remains to be witnessed.

Nareshchandra Laishram

Lobbying

Lobbying

The Cellular Operators Association of India (COAI) has established itself as

one of the most efficient lobbying machines in corporate India. Under its able

banner, the industry had successfully got a major concession from the

government, when the industry was allowed to migrate to a revenue-sharing regime

from a fixed licence system. On several occasions, it has been able to solve

highly contentious issues with the incumbent monopolies, with the government,

and with various other communications service sectors.

The launch of WLL mobile services has once again given COAI a call to do what

it does best–lobbying. This time, the issues are very serious, and the risks

of failing are threatening as never before. And most significantly, the

opposition is equally powerful this time.

COAI

has three main objectives. One, to prevent WLL service providers from operating

mobile services. Two, to limit the WLL players from offering features that a

full-fledged mobile service can offer. And three, to get all the concessions it

can get vis-à-vis the licensor, the incumbent operators and the other service

providers.

With these objectives, the cellular industry has opened the Pandora’s box.

A barrage of new issues have emerged apart from several long-standing matters

getting re-highlighted.

Limited Mobility



Cellular operators feel that the biggest threat to the growth and

investments in the mobile sector is the uncertainty created by allowing fixed

service operators to provide WLL (M) services. Not satisfied with TDSAT’s

decision allowing fixed service providers to offer the WLL (M) service, the

cellular industry took the matter to the Supreme Court.

On

December 17, 2002, the Supreme Court decision said, "We accordingly set

aside the same and remit the matter to the tribunal for reconsideration with

special emphasis on the question of level playing field, on the basis of

materials already on record, after hearing the counsel for the parties concerned

… Needless to mention the fixed service providers will be bonded by the

ultimate decision to be given by the tribunal."

Now, with the WLL (M) case coming back to TDSAT, the tribunal has decided to

review the case from 24 February 2003 onwards. It seems that TDSAT will pay

special emphasis on level-playing field conditions.

The cellular operators are just stopping short from saying that their view’s

have been vindicated. They now are highly confident of getting level-playing

field.

V5.2 Interface



COAI has insisted from the very beginning that fixed service providers

should be allowed to use V5.2 interface and not A+ interface. With V5.2, feel

industry experts, basic service providers cannot load more than 60,000

subscribers in a metro circle with the given spectrum, without increasing the

capex to a sizable extent. Also, calling line identification (CLI) and other

value-added services cannot be offered with V5.2.

On 5 March 2002, COAI had filed a petition before TDSAT to ensure

implementation of the V5.2 interface as prescribed by TEC or an improved version

supporting PSTN architecture only. The TDSAT adjourned the hearing of the case

from time to time as the basic issue regarding limited mobility was before the

Supreme Court. In the meanwhile, the TDSAT had issued status quo saying that

basic service providers should ensure that the decision of the government dated

25 January, 2001, which reads as follows:

"The basic telephone service licensee may provide handheld telephone

sets to its subscribers with wireless access systems subject to the condition

that mobility with usage of handheld telephone sets shall be restricted within

the local area i.e. the SDCA in which the subscriber is registered. While

deploying such systems, the operator has to follow numbering plan of the SDCA

and it should not be possible to authenticate and work with the subscriber

terminal equipment in SDCAs other than in which it is registered. The system

shall also be so engineered as to ensure that handing over of the subscriber

does not take place from one subscriber to another SDCA while

communicating."

After the Supreme Court decision on WLL (M), the cellular operators moved

another application in TDSAT that Tata and Reliance were violating the status

quo order of TDSAT. TDSAT clarified the status quo order and directed DoT, TRAI

as well as operators to comply with license terms and conditions.

The TDSAT hasn’t yet fixed any fresh date for the V5.2 case. It seems that

TDSAT will look into this case after looking into the WLL (M) case reverted back

to it from the Supreme Court.

The V5.2 issue is very crucial for both cellular and basic service providers

and whoever wins will have an edge over the other.

Access Charge



GSM operators have been saying that interconnect agreements are

discriminatory in nature. While they pay Rs 1.20 for calling a fixed line

operator the WLL (M) subscriber does not have to pay anything. As a result,

cellular services are more expensive than WLL (M) services. GSM operators also

say that they were unable to implement the calling party pays (CPP) model

because of the access charge.

Recently, cellular service providers denied interconnect to WLL (M) providers

like Tata Teleservices and HFCL, and reiterated that they were willing, able and

ready to provide immediate interconnection to any or WLL (M) operators based on

reciprocal commercial interconnect agreements. With this, they were trying to do

two things. One, pressurize the regulator to look into this matter at the

earliest, and two, stop the march of WLL (M). It can be said that they have

succeeded party, considering the fact that private fixed service providers were

able to add only 14,498 WLL (M) connections in the month of December 2002.

It was only after the then minister of communications, Pramod Mahajan,

assured them of reviewing the level-playing field issues by requesting TRAI to

finalize a ‘just and fair’ interconnection framework at the earliest, that

cellular operators agreed to restore interconnect with WLL (M) operators as an

interim measure.

TRAI hurriedly announced the 24th Amendment to Telecommunication Tariff order

and Telecommunication Interconnection Usage Charges (IUC) Regulation, 2003 (1 of

2003). The amended tariff and interconnection charges are applicable from 1

April 2003, whereby cellular operators have to pay an access charge of Rs 0.50

per minute for fixed line calls in metro areas and Rs 0.60 (plus transit cost)

per minute in the case of circle areas. For WLL (M) calls, cellular operators

have to pay an access charge of Rs 0.30 per minute in metros and Rs 0.40 (plus

transit cost) in case of circles. At the same time, fixed line operators have to

pay an access charge of Rs 0.30—0.40 per minute for calls terminating on the

cellular networks. WLL (M) service providers will also have to pay a similar

access charge of Rs 0.30—0.40 per minute for calls made to cellular networks.

All this will lead to extra revenues for cellular service providers. However,

in the bargain, they have to provide free incoming calls without charging

anything extra. With the imposition of access charge for calls made to cellular

and fixed line from WLL (M), the difference between cellular and WLL (M) tariffs

will decrease. This will give GSM operators some reason for cheer.

License/Entry Fees>>>>>>>>>

Cellular operators say that they have paid much higher entry fees as

compared to that paid by basic service operators offering WLL (M) services. Let’s

look at the statistics in the post-NTP ’99 and pre-NTP ’99 contexts.

Post NTP ’99, cellular service providers have paid an entry fees of Rs

1,633 crore and a performance bank guarantee of Rs 250 crore. This totals to

around Rs 1,833 crore for 17 licenses whereas basic service operators have paid

entry fees of Rs 768 crore and a performance bank guarantee of Rs 3,072 crore, a

total of around Rs 3,840 crore for 25 licenses. So, post NTP ’99, basic

operators have paid more than cellular service providers.

Pre NTP ’99, cellular service providers have paid Rs 7,300 crore for 42

licenses whereas basic service providers have paid Rs 1,600 crore for six

licenses.

Thus, in total, cellular service providers have paid Rs 9,133 crore whereas

basic service providers have paid Rs 5,440 crore, which has a substantial amount

of performance bank guarantee of Rs 3,072 crore.

Here, the response of the licensor could be that the license/entry fees looks

okay, considering the fact that more licenses were issued in cellular services

than in basic services. Even rollout obligations in basic services are more

stringent.

Revenue Sharing



Cellular operators have been complaining that they have been paying 35-42

percent of their revenues by way of high levies and costs like license fees,

interconnection charges, spectrum usage charges, and service tax. Their demand

is to reduce the revenue share from the existing rate of 12 percent for category

A, 10 percent for category B, and 8 percent for category C circles. They point

out that reductions in revenue sharing will help them increase their profit

margins and there is a possibility that some of the benefits will be passed on

to subscribers.

This will be a welcome thing, if it comes through. However, this benefits the

fixed service providers also, as the same kind of revenue share is likely to be

applicable to them as well.

Spectrum



COAI is of the view that cellular operators are operating with suboptimal

spectrum as a majority of them has 6.2 MHz. In Delhi and Mumbai, operators have

8 MHz each. The suboptimal spectrum allocation increases the capital expenditure

and also affects the quality of the network if one is not investing in more base

stations. COAI has been quoting international examples whereby the average works

out to be 2*17 MHz per cellular operator. The matter is currently under review

by the Department of Telecom.

An increased frequency spectrum will help cellular service providers to

minimize capital expenditure, so that they can lower the cost of services and be

more competitive vis-à-vis WLL (M) services.

It seems that the spectrum issue will take time to get resolved as the

defense sector is sitting with lot of spectrum. One solution is that the

government takes the existing frequency bands from defense and offers it other

frequency bands.

Pravin Prashant

Joint Industry Development>>>>>>>>>>>>>>

The cellular industry has been one of the best examples

of joint industry development. The operators know there is a huge market ahead

of them–so, the benefit of growing together has been larger than competing

against each other. In Cellular Operators Association of India (COAI), the

industry has not only the country’s most aggressive vertical-industry liaison

unit but also a well-oiled initiator of joint business development and promotion

activities. This organization has shown the way to all other associations how

industry data is collected and presented. COAI’s subscriber tracking mechanism

is certainly among the best in the world. Though not sacrosanct, the monthly

cellular subscriber base that it tracks is confidently cited internationally by

the government, industry, media, financial analysts, banks, and regulators. GSM

India, the India interest group of GSM World (the premier global GSM industry

association) has also been there for some time, doing some work on the common

technology and operational fronts.

While COAI fights the case against WLL, GSM operators have to worry about the interim period before the court cases are decided

The Reliance Trigger



Just when things were coasting along, the cellular boat was hit by the wave of
WLL mobile services. While overtly the WLL players were playing the

affordability and limited mobility card to introduce mobility, the technology

that they were using for mobility was by no way limited in any sense. CDMA

worldwide has been known to compete well with GSM as a mobile technology, though

it is a newer technology and has not been implemented as extensively as GSM. And

this fact did not take long for consumers to learn. Today, it is quite implicit

among the service providers as well as customers that WLL mobile is as good as

cellular. Everybody knows quite well that it is the regulation and not the

technology that’s keeping CDMA from unleashing a whole array of value-added

features that are similar and in some cases better compared to features provided

by GSM.

The cellcos are fighting hard to keep WLL’s wings

clipped. But their confidence is greatly eroded by the fact that the biggest

Indian private sector company, a master in lobbying and influencing, is also in

the fray. The Reliance camp has also been proactive in projecting the major

benefits of CDMA technology. Unlike others, it has gone ahead with a campaign

that does not seem to be affected at all by existing regulatory norms about

limited mobility. Its army of Dhirubhai Ambani Entrepreneurs (DAEs) is going

ahead with spreading the word around that there is nothing in the WLL licence

that prohibits such CDMA features as Internet browsing, multimedia, e-mail,

gaming, applications–precisely the things in which CDMA is perceived to score

over GSM. The Reliance camp already seems to be convinced that it is just a

matter of time before these things are allowed in WLL mobile.

Taking on CDMA



It is this confidence of Reliance that is the most worrying aspect for the GSM
industry. And the joint industry development activities of GSM operators have to

be seen in this context. While COAI fights the case for stopping the

introduction of WLL mobile services, GSM operators worry about the interim

period before the cases are decided.

COAI is taking on the promotional activities in

addition to what it did earlier. It has taken every opportunity to put across

the fact that the cellular industry has been the star performer of the

communications sector, having established a 10 million subscriber base in quick

time and bringing in almost 50 percent of the Rs 43,000 million cumulative FDI

into the telecom sector since 1993. Also, the organization has been playing on

the consumer’s emotions by bringing out advertisements to that effect–an

example being that of pleading for justice in the case of interconnection on

behalf of 10 million mobile consumers.

The GSM Supplier Association (GSA) came to India,

holding their first seminar in December 2002. The agenda was to put to

perspective the competitive advantages of GSM over other mobile technologies.

The seminar identified SMS, roaming and scale of volumes as major advantages of

GSM. The core message was, "It is vital that India is able to capitalise on

the extended value proposition that GSM can deliver today and in the near

future."

GSA also announced the setting up of GSA India chapter

which will spearhead the joint promotional activities of the GSM technology and

solutions provided by the vendors.

Individually too, cellular service providers have been

trying their best to remind their customers that they would be bringing down

their prices. SMS have been sent to that effect and the company executives have

made public statements saying that cellular service providers would match the

WLL mobile tariffs, provided there is level playing field. After the early days

of 1996-97, relationship marketing is back.

COAI to Play Bigger Role



Though COAI has been proactive in carrying out its regulatory and liaison
functions, it has not gone beyond the basic data collection and occasional

promotion work. It has to focus on activities that it has listed out as its

objectives. These includes studying industry best practices, facilitating

enhancement of standards and quality of service, continuous effort to ensure

customer satisfaction. The COAI can take a leaf out of NASSCOM which does an

excellent work of doing market research, forecasting and events towards

promoting Indian software industry.  

Nareshchandra Laishram

Infrastructure sharing>>>>>>>>>>>

Network sharing is very prevalent in Europe, where

operators have paid huge licences fees. As a result, several high-profile

sharing deals have been made. In Germany, multiple operators have built common

network right from the scratch. The biggest



infrastructure sharing deal has been between BT and Deutsche Telecom–which
share common networks in UK and Germany. Vendors like Nokia have also developed

multi-operator radio access equipment to facilitate network sharing.

Real estate for base stations and backbone towers can be shared without much fuss to begin with

In a highly competitive mobile industry like India,

where price wars are the order of the day–reduction of capex and opex assumes

critical importance. Like Europe, the cellular industry in India operates in an

expensive licence regime where thousands of crores of rupees have been paid to

obtain licences. Also, the country’s large geography makes it a tough

challenge to cover the various cities, towns and villages with cellular

networks. In this context, infrastructure sharing among cellular operators is

the way to go about to not only expand rapidly but also be at a competitive

advantage.

However, while the benefits of sharing can be high, the

risk of not being able to distinguish one’s service from the other is also

real. Perhaps this is the reason why in India, despite having multiple cellular

service providers in each operating areas–a total of 68 networks are

operational in the country–the opportunity to share the network has not been

explored widely. There are exceptions starting to happen, though. The entry of

the third and fourth operators has somewhat made some operators look at this

option.

COAI has proposed that cellular operators share their

core wireless network infrastructure as well. Real estate for base stations and

backbone towers can be shared without much fuss to begin with. And going ahead

such resources as switches and access radios which form the crux of a cellular

network can also be shared. Two alternatives for sharing costs are envisaged.

For a greenfield project like the fourth operator networks, the capital

expenditure can be equally shared by the operators. In case of the operational

expenditure of maintaining the sites, one of the operator can do the maintenance

while the cost can be shared in a ratio negotiated by the operators.

In case of infrastructure sharing with an existing

site, the new operators can be charged for sharing the network by arriving at an

operational cost taking into consideration the initial capex of the existing

network, depreciation, and maintenance costs.

This will allow faster rollout of new players and

create additional revenues for incumbents.

COAI’s proposal already seems to be paying dividends.

By striking a strategic alliance, AirTel has taken the help of Escotel’s

infrastructure in Kerala to quickly start its services in the state. The two

have agreed to share each other’s networks in states where both have

operations. Currently, Escotel can also make use of AirTel’s operational

network in Himachal Pradesh. The sharing involves co-location of antennas with

both operators taking the burden of the operational costs together. Under the

sharing system, multiple antennas can be located on a tower with a distance of

one meter to get proper signal for all operators.

Other operators are also known to be exploring this

option. It is being seen as a win-win situation for both incumbent mobile

operators as well as the new entrants.

Another significant case of infrastructure sharing

among the cellular operators in India has been that of using the same long

distance carrier to route their national long distance mobile calls. Almost

every cellular service provider in India today uses Bharti Tele-ventures’s

long distance network, thus allowing them to lower the tariffs of long distance

calls. A tariff cut in this respect has already been announced and further

cell-to-cell call benefits could come for customers due to this sharing

arrangement.

Sharing in the Future



The sharing of cellular infrastructure in India is still a wide open area. Apart
from sharing of towers, not much resources are being shared by operators. Areas

like sharing of transport equipment, switches and even radio frequencies assumes

great importance if the cellular industry has to achieve the tall targets of 120

million by 2008 that it has set for itself.

Today, cellular networks are more

concentrated around cities and major towns. Tomorrow, they will have to further

expand into the interiors of the country, touching even the villages. All this

means expensive rollout requirements which run into billions of dollars in capex.

Already, there are networks that are waiting to be filled up. Instead of waiting

for subscribers to come and make use of it and pay for it as a result, it makes

sense to present ones’s network as an outsourcing opportunity for other

cellular companies which are setting up networks. This would save a huge amount

of money for the new network providers while bring in new revenues for the

existing network owners.

Spectrum availability has also been in

news frequently, with cellular operators complaining of clogging of their

spectrum in several pockets. But, it is also a fact that the spectrum that they

have been allocated for regions where the traffic is not so much are not being

fully utilized. This idle spectrum can be put to use in future, if it is shared

with another operator who does not have adequate frequencies or is awaiting for

sanction of frequencies. Technologies that enable such sharing are already

available.

Nareshchandra Laishram