Presentation
to
Department of Telecommunications
WPC Wing
on
Spectrum Valuation & Pricing
by
ISPAI
Internet Service Providers Association of India
www.ispai.in
About ISP Industry in India
 Internet subscribers
9.22 million+
 Broadband subscribers
2.4 million +
 Operational ISPs
90 +
 Annual Turnover of ISP Industry
Rs. 1600 Cr.+
 Annual Growth rate
25%
 Target fixed for 2010
40 million
 Broadband
 Narrowband
20 million
20 million
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Spectrum
 Spectrum Scarce
 Needs to be assigned to business
for use.
 How should this be done ?
 When done – it should be fair to
the Govt, consumers, business
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Spectrum Valuation & Pricing
 Spectrum Valuation has separate
meaning for the Govt and
Business :
For Govt – as a socialist country, it
means to provide a means of
communication,
healthcare,
Governance, education and last of
all, revenue.
For Business – Ability to provide
required service to consumers at
affordable rates and profit.
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Method of Allocation
 Will vary for non consumer requirements, voice
communications and BWA.
 Suggested methods :
 For Voice communications – we recommend a
combination approach of allocation and auction /
revenue share.
 Allocate minimum spectrum to new operators
e.g. 6 MHz which allows him to start business.
 Once the operator has reached a success level
and he wants to expand, then he enters
auctioning process with his peers.
 Alternatively the Govt fixes a percentage of
market capitalization on a quarterly rolling
system of revenue share of spectrum.
 Advantages :
Allows for competitions, Growth and adequate
revenue to Govt.
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For BWA
 ISPs can not compete with BSO’s due
to unequal financial capabilities.
 Need to identify serious players.
 Allocate spot spectrum at reasonable
rate to enable reasonable end user
price.
 BTS charges to be for one specified
BTS only in a area.
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The ISP’s Legitimate Case For WiMax Spectrum
Suitability Of ISPs
• The ISP’s fixed line network and very business is
geared to provide unfettered internet access, high
speed data downloads and VoIP.
• Wireless Broadband is the natural extension of
existing fixed line broadband business. As usage
moves over to handheld devices, ISPs cannot be
denied 2.5, 3.5 Ghz licenses. It is akin to asking
them to shut down their business.
• Barring ISPs from allocation of Wi-Max, just like
the existing proscription against PSTN
interconnection, in no way benefits users or
anyone other than the incumbents/ cellular
operators.
• Giving 2.5 GHz exclusively to Incumbents means
effectively killing mobile wirless Broadband.
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Regulator’s/ Deciding Authority’s Responsibility
•
The DoT may not realize but their unfortunate decision helps
ensure a new much-needed technology doesn’t come in the
way of the cellular establishment milking their incumbent
networks into near perpetuity.
•
The preponderance of advantage enjoyed by incumbents
means a regulator or deciding body like the DoT fails even if
it simply remains scrupulously neutral. Be it the EU, North
America, Australia, Malaysia or India for that matter in the
past, we see definitive change only happen through rulings
that give a real edge to newcomers and ISPs.
•
Should however the DoT choose to listen, giving 2.5,3.5 or
3.3GHz to ISPs while reserving 3G for cellular operators
may work wonders for users as well as the cellular
establishment whose own long term interests are ill-served
by their present approach.
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Experience Other Countries
•
Earlier this year the Malaysian Regulator MCMC disallowed
Malaysia’s cellular establishment from bidding for wireless
broadband spectrum.
•
Early August this year the FCC Chairman announced ground rules
when granting Google’s petition enough was ceded to ensure a
‘third pipe’ allowing ISPs a fighting chance to offer ubiquitous, true
wireless broadband mobility in the face of a recalcitrant cellular
lobby.
•
In other words, the Malaysian MCMC and America’s FCC feel they
have cause to suspect the cellular establishment’s bona fides in
wanting to establish a ubiquitous wireless broadband network that
would compete with 3G.
•
There is absolutely no evidence to suggest that Indian cellular
operators will do otherwise, especially if a 3G auction is slated for
later. They will keep the 2.5Ghz spectrum away from others while
themselves focusing on 3G.
•
The cellular operators should indeed focus on 3G which is a
natural extension to their existing network while the ISPs are
allowed to deploy wireless broadband on 2.5Ghz Wi-Max which is
a natural extension of their business.
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Recommendations

Follow methodology of allocation and auction/ revenue
share on market capitalization

Allocate spectrum for BWA on reasonable charges for
urban & rural areas appropriately

One BTS per designated area to be charged. Balance BTS
may not be charged or charged nominal ly for effective use
of spectrum.

Spectrum for Voice and 3G be separated from BWA and
dealt differently. Cellular Operators may not be permitted
to obtained and hoard BWA Spectrum.
 Voice, 3 G – 1.8, 2.1 Ghz
 BWA – 2.5, 3.3. & 3.5 Ghz

WI-Max Type new technologies be incentivised for use by
ISPs’ specially in semi-urban / rural areas.
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Thank You
www.ispai.in
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