NEW DELHI, India-The Indian government has opened the floodgates to wireless technology by allowing fixed-line service providers (FSPs) to offer wireless local loop (WLL) and satellite-enabled telephony services. The duopoly regime in basic services also ended, and most major cellular companies have joined the fray for basic telephony.
An immediate fallout of this mad rush for WLL licenses could mean a meager response to the fourth cellular license in telecom circles, or geographic service areas. A formal call for tenders for the cellular license auction was under way at press time.
The first three rounds of bidding to induct one private FSP in each circle to compete with the government monopoly have evoked a poor response, with just six operators picking up the licenses. Now the communications ministry has allowed an unlimited number of players into all 21 telecom circles and permitted them to offer “limited mobility” services using WLL and satellite. More than 110 applications have been filed by various companies for WLL licenses. Profitable circles, such as New Delhi, Tamil Nadu, Karnataka and Maharashtra, have received up to eight bids each.
The licenses will be awarded fairly soon on the basis of the financial strength of the companies and their rollout plans. WLL licenses will be doled out at a paltry entry fee. Companies must share revenue with the government at the rate of 12 percent, 10 percent and 8 percent respectively for the three categories of telecom circles A, B and C. An additional revenue share of 2 percent of annual gross revenue earned from WLL subscribers will be levied as a spectrum charge for allocation of five plus five megahertz in paired spectrum in the 800/900 MHz band.
“It is a very unique situation in India. Until now there was a price for entry into the wireless segment. Now it’s almost free. The market value of the spectrum that WLL operators will get for the small entry fee is worth several billion dollars,” said Dr. Mahesh Uppal, director of Telecommunications and Computer Information Systems, a New Delhi, India-based consulting firm.
FSPs can offer mobility to their subscribers within local areas known as “short distance charging areas” (SDCAs). The tariff charged to subscribers for now has been fixed by the government at 1.2 rupees (US$0.03) per unit call.
“The service is being made cheaper artificially. WLL technology is no way cheaper than GSM. But uneven conditions like lower entry fees and interconnection charges make it cheaper. The conditions for GSM and WLL are so different,” observed Dr. Uppal.
The entire wireless scenario has been thrown into turmoil, with all players including the former monopoly BSNL and all other government-owned companies like MTNL and TCIL seeking WLL licenses.
