Union cabinet approved the spectrum sharing policy finalized by the Telecom Commission. Examine the implications of this policy for the telecommunications sector and for the consumer. (200 Words)
Spectrum sharing is the process of pooling down of the spectrums by the telecom firms to enable efficient utilization of the whole spectrum. Its implications can be:
- Wider spectrum for the involved parties would enable to focus larger geographic area, broader consumer base and avoid congestion.
- Reduced operation costs for the telecoms and potential for technology upgradation.
- Increased revenue for the Govt. through sharing fees.
- Consumers to receive better QoS, high data speeds at fair costs.
However, with the strong regulatory environment of India, the cost-benefit analysis may lead to a deduction of loss to the telecom providers/customers due to the risks involved:
- Geographical or time constraints imposed by regulator can inhibit telecom’s expansion of service.
- Reduced freedom of choice or flexibility as to how spectrum should be used might narrow down the scope for upgradation.
- With widening m-governance, there is a potential for negative impact on the economy if spectrum sharing fails, including critical functions such as public safety.
The sharing and licensing fees or switching costs could be routed by the telecom service providers towardsusage costs by customers, beating the very purpose of spectrum sharing.
Hence, all these parties i.e. Service Provider, Regulator and Consumer are crucial for a successful spectrum sharing environment. The regulator must facilitate competition by ensuring adequate spectrum for all parties. It can provide incentives to the providers which achieve QoS standards and spectrum utilization efficiency faster. Undoubtedly, better data services are a boon for governance as well as socioeconomic reforms, but before launching it full fleshed, there must be a rigorous cost-benefit and risk assessment of spectrum sharing.
Recently the Union Cabinet cleared guidelines for spectrum sharing. What are the objectives of these guidelines? Do you think they would solve some of the pressing problems faced by consumers of telecommunications services? Critically examine. (200 Words)
In India, spectrum is divided among operators in small and fragmented manner. Spectrum sharing will allow telecom companies to pool their spectrum holdings, leading to improved spectral efficiency.
Sharing can also provide operators additional capacities in places where there is network congestion. For consumers, this is likely to lead to better quality of services — fewer call drops and faster data speeds.
The regulator also recommended allowing the trading of spectrum. As of now, only government is allowed to allocate spectrum to telecom firms through auctions. It will enable telecom companies, who have a lower subscriber base or un-utilised spectrum, to trade or share it. This move would be a boon for the industry, which will ultimately benefit the end consumer through better services.
But unfortunately, due to many of the restrictions placed, the full potential of spectrum sharing cannot be made use of. Some of the difficulties are listed below.
- Smaller players might have some idle spectrum left wasted, because they will not be able to pay the government the difference of money whenever they want to share spectrum with a company which has bought spectrum at market price
- For all the allocated spectrum to be converted into auctioned spectrum, it will take a few years and until then there will be a lot of idle spectrum lying around with all its potential wasted
- Double taxation – TRAI has stated that all revenue from spectrum trading should be counted as a company’s adjusted gross revenue, on which spectrum user charge will be levied. This is in effect a massive burden on the spectrum owner for having to pay twice for the same spectrum.
- Since the spectrum sharing is so expensive a lot of companies are not exactly eager to engage in spectrum sharing business as of now. For the consumer, this means that the problem of dropped calls and slow internet will persist.