For well over a year and a half this column has been arguing, using plain common sense as well as various judgements by the telecom dispute court, that the government's move to allow WiLL/CDMA-mobile firms such as Reliance Infocomm and Tata Teleservices a backdoor entry in the mobile telephony market was unfair.
Yet, the government went ahead, and once firms like Reliance began their ad blitz with a 40-paise offer for even long distance calls, it seemed just a matter of time before GSM-cellular firms got wiped out.
Indeed, at one point, the telecom regulator, Trai, even fixed interconnect charges that made it cheaper to call WiLL/CDMA phones from land lines in comparison to calling cellular phones!
Anyway, after a bruising battle in the marketplace, there are just 7.5 million WiLL/CDMA-mobiles in the country as compared to 26.2 million cellular ones, and in this year's first quarter GSM players had a higher growth as well as earnings-per-customer.
Not surprisingly, the battle has now moved to the second and more decisive phase, and this time around, there is no role for the customer who raised a stink over Reliance's billing problems for instance and even forced the company to change its marketing strategy.
The new battle is being fought completely in the courts of Trai and the government, and is about spectrum or the airwaves on which telecom signals travel to and from your phone.
Within this spectrum, the fight is about different bands that have been allocated to each type of mobile player -- to ensure the signal from your car remote does not interfere with that of your FM radio, to use a non-telecom example, the government allocates different bands or frequencies for different services, and even for different players (like 91.0 MHz for Radio City and 98.3 for Radio Mirchi).
In telecom, such frequencies are specified by the International Telecom Union (ITU), as a sort of standard, and most countries tend to follow this since it allows equipment suppliers to develop their products to operate on certain frequency bands, apart from allowing seamless global roaming.
Today, to get back (finally!) to our story, even customers who don't think too highly of the quality of the WiLL/CDMA services agree the quality of surfing on the Internet is vastly superior.
I've found in certain areas, surfing speeds are higher on a Reliance mobile as compared to even expensive ADSL connections -- in any case, for people who want to use the Net on the move, there is nothing cellular phones have in comparison.
So, the cellular industry needs to move, as in the rest of the world, to what's called 3G services. Without this, there is no hope for cellular firms in the market for genuine broadband high-value applications.
After its initial problems, due to excessive licence bids, 3G services have made a strong beginning. There are already thirty-three 3G networks in the world with 6 million customers and another 30 launches are expected during the year.
What could jeopardise this move, and that is the subject of this column, is the fight for spectrum. As long ago as 1992, the ITU earmarked the globally harmonised 1920-1980 MHz and 2110-2170 MHz frequency band (in jargon, the IMT 2000 paired band) for 3G services, whether offered by GSM players or by WiLL/CDMA players.
This was faithfully replicated in India's National Frequency Allocation Plan. For the current levels of offerings (essentially 2G stuff), as the licence issued to the WiLL/CDMA-mobile firms specify, these firms will be issued spectrum in the 824-844 and 869-889 MHz band, and once this gets over, they will be allocated more spectrum in the 1710-1785 and 1805-1880 band.
Pretty clear so far, you'd say, so where's the problem? The problem lies in the fact that the WiLL/CDMA firms are now arguing that even for their 2G operations they need spectrum in the 1900 MHz band as they've exhausted their existing allocation in the 800 band.
Two issues arise out of this. One, the exhausted-spectrum is a matter of dispute -- indeed, the WiLL/CDMA firms are locked in a fight with a department of telecom committee which has poured a lot of cold water on their position.
Two, the 1900 MHz band clashes with part of the 3G band, effectively blocking the way forward for GSM cellular firms to graduate to newer levels of technology as there is a high degree of frequency disturbance that is caused by the fact that the uplink and downlink of the two systems clash.
Both the GSM cellular and WiLL/CDMA firms are locked in a battle of position-papers to argue their points. While it is true their licence says they should get fresh spectrum in the 1710-1785 and 1805-1880 band, the WiLL/CDMA firms now say there aren't enough equipment suppliers in this band.
The GSM players, however, have come out with a list of suppliers who make equipment in this band! Besides, they add, countries like China which allow WiLL/CDMA players to operate in the 1900 band are planning to withdraw this so as to prepare for the launch of 3G services, whether these are offered by GSM or WiLL/CDMA players is irrelevant (Japan has 3G CDMA services already).
The US, being a very late entrant into the cellular business is the only other country that allows use of the 1900 band for WiLL-CDMA, and it has now come up with an altogether new frequency band for 3G services!
The telecom regulator has come out with a consultation paper that, not surprising given that it is asking for comments, is quite ambiguous. Which way the government will finally move will decide the future of the GSM versus CDMA/WiLL industry. If the past is any indicator, the signs for the GSM industry aren't too bright.
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