Giving the angst is its wake, the Indian regulatory authority is apparently not just burdened with acuity of mind but unfortunately lets it be known through a regular consultative & review process with the industry. Halfway through the TRAI’s August 2007 review on capping service providers and its clear this is not the India I bolted from in the Eighties. But the sizable part of that India still resident in the DoT does not like this one at all.
Equally unsettling for incumbent mindsets is the consistency threading through all TRAI assessments. Reading TRAI’s September 2006 review on allocation and pricing of spectrum for 3G & wireless broadband one sees an approach to competitiveness and transparency that echoes as resoundingly as in the August 2007 review mentioned in the above paragraph. One may quibble the conclusions but arguments are thought through and consistent across the Authority’s various reviews. As far as the TRAI is concerned it appears the New Telecoms Policy (NTP) of 1999 is nothing less than a Telecom Constitution and barring amendments, violation of statute isn’t an option any more.
“It is evident from the (NTP of 1999)" the TRAI says, "that there is no intention of placing any artificial cap on the number of (mobile) access service providers. Clearly, the underlying theme is to ensure optimality for existing operators so as to provide good quality but at the same time it has not barred entry of new operators”. With that, the August 2007 review disabuses incumbents from any hope of restricting membership to the cellular club.
The Indian businessman has a fine sense of smell, a whiff of faint opportunity being enough. The above opinion admitedly grants more than just a whiff. The gold rush began barely a few days following TRAI's 28 August 2007 announcement encouraging a free for all. 200 something license applications later the DoT must be asking TRAI what were they thinking. Speaking to the Indian Express, a senior DoT official termed the rush of applications as “sheer madness” and said the Department would start scrutinizing these documents soon. DoT would screen the applicants once a committee appointed by communications minister A Raja comes up with fresh guidelines detailing the minimum net worth, ownership and other crucial aspects of the applicants.
By mid-September an overwhelmed DOT announced its intention to not accept any more applications after 1 October. Not, they hastily added, to cap applicants, but it made little sense accepting any more applications before the ones received could be processed. And, where was the spectrum to distribute amongst the aspirants?
But of course the TRAI begs to differ. At least it did in the August 28 document that started the stampede. I suspect they still do and view the mad rush with a sanguinity based on principled approach to licensing, allotment and pricing. Maintain course the TRAI suggests and let market forces resolve matters.
Only that it’s hard for many to let go of supply side thinking after so many years under a license Raj. So it may not be just market forces cajoling applicants to submit the forms in triplicate. Besides, its anyone’s guess how many of these stellar newbies are being grandfathered by incumbents to access additional spectrum.
TRAI’s market driven thinking couldn’t be any more at odds with the DoT mindset succinctly laid bare in their letter of 13 April. While it offically requests a review the underlying tone screams out:
1) Our concern is cellular and nothing but the two cellular life forms of GSM and CDMA.
2) Please oh please tell us we can cap applicants. There’s a shortage of spectrum and the incumbents – those guys who always ante up when asked – need it for themselves.
Well, we all know by now what the TRAI gave them instead. One must admit to a surreptitious glee visualizing DOT Babus drowning in paper though the deluge is really no fault of theirs, they being as intransigent towards an open market as ever before.
The TRAI’s response to the DoT’s concern on paucity of spectrum is to tighten the subscriber-linked criteria for additional spectrum thereby eliciting more howls of protest. But TRAI makes a case wonderfully quoting facts, figures and international precedence to show technological advances allow service providers to maximize bang for the buck from a given band of spectrum. Growth percentages annexed to the recommendations prove not only that such technology to maximize spectral efficiencies works but that much is already in use by Indian operators.
The flood of applications will abate and life in the DoT halls resume as before. Life for everyone though would be a lot easier if TRAI was the final arbitrator for spectrum allocation in keeping with established precedence elsewhere in the world. But the Government in their wisdom has held on to that power and so the last thing we want to hear from DoT is that they are overwhelmed. That, comes with the turf.