And now, NTP 2007?

While various players in the telecom industry battle it out in the marketplace, an even fiercer battle is being waged by the Cellular Operators Association of India (COAI) and the Association of Unified Access Service Providers of India (AUSPI), on behalf of the cellular and CDMA mobile players, respectively. At the heart of the squabble is the industry's need for spectrum, or radio airwaves, on which to carry their phone signals, and how this is to be distributed among competing players "" the fight is for both the current 2G spectrum and the next generation, 3G spectrum, which allows mobile phone players to offer Internet access at broadband speed and therefore a host of applications such as live TV and video-on-demand.

The CDMA players argue that the cellular industry's licence stipulates that they can get only a maximum of 6.2 MHz of spectrum, and that an inquiry should be held into how they were allotted more than this; the demand is that the cellular industry be asked to pay an entry fee for the "extra" spectrum, implicit in this being the position that no more spectrum should be offered to them as a matter of course. The cellular companies rubbish these arguments, and cite various government letters, clauses in the licence, and the recommendations of the telecom regulator to show that it was always understood they would get more spectrum when they needed it "" indeed, in one of its letters, the COAI shows that AUSPI had signed off on one such committee which prepared a road map to give the cellular industry up to 15MHz of spectrum. As for the inquiry into how the cellular companies were allotted "extra" spectrum, the COAI has in turn asked for an inquiry into how CDMA firms began offering fully mobile services!

The problem with all the letters/clauses/recommendations is that no party comes out smelling of roses, and that is why the matter may end up in the country's courts, as they did in 1998 and in 2002, when the government came up with an all-industry settlement. The department of telecom, for instance, has written contradictory letters/orders "" one of the orders which lays down the fee structure for extra spectrum for CDMA firms talks of allocating more spectrum than is available. And while the cellular industry argues its future needs were made unlimited as part of the 2002 settlement, the licence conditions leave matters open by saying detailed guidelines or allocation and pricing spectrum will be issued separately from time to time. The cellular industry takes that to mean that spectrum will be issued; others, including some in the government, argue that there is no binding obligation.

The government is trying to sort out matters by appointing more committees to go into the issue of spectrum usage and pricing (Trai has kept quiet on 2G spectrum, but recommended that 3G spectrum be given without an entry fee to existing users and then changed its mind). While it is difficult to predict how things will turn out, one factor needs to be kept in mind: for the future, it would be important to ensure that spectrum be allocated only through auctions. Apart from ensuring there are no fights of the kind taking place now, auctions should ensure that no user hoards this scarce resource and that no closed shop operates in the industry.