Sunday, November 11, 2007

Dal-Roti and India telecom Spectrum tangle

DAl-Roti and spectrum tangle

With the telecom tangle getting worse each day, I was surprised to know that even non-industry people are taking interest in the whole controversy. Maybe, the reasons are not far to fetch, there is a general feeling, will this issue effect in anyway the mobile phones they are using; or people are so much used to mobile these days that any news related to wireless industry catches attention.
So many times, I have heard people say “What is this spectrum thing coming out everyday? How is it related to the phone we use? What is this GSM Vs CDMA thing??

The barrage of queries really made me ponder, is there anyway a simple analogy can be given, that can translate the seemingly complex issue in a layman’s language.

A thought came to me, can we relate a basic day to day thing like a “Dal-Roti to a complex issue like spectrum. Yes it can be!! Consider Dal-Roti to be spectrum and thus the story can start.

Let us suppose a simplistic scenario where in the government, asks a bunch of private players (here private GSM operators) to feed 100 people (GSM handheld users or end users using mobile phones) each in a select area (in telecom terminology Circles), in lieu of it the government promises 100 cups of dal-100 Roti’s. The condition here in is that the Private players have to pay for the dal-roti provided by government (license fee) and also keep paying as per understanding as the amount of dal-roti increase (revenue share). Also the private players have to invest in the paraphernalia needed to bring dal-roti to people for example they have to buy 100 plates, Glasses, etc (herein investment in telecom infrastructure) to feed dal-roti to the select people.

Now government has promised the private players that as per specified norm the dal-roti supply will be given to the players (herein additional spectrum) for example after every 100 people being fed, additional 10 cups dal-10 roti will be provided to feed next 50 people (herein much touted subscriber based criteria). Based on this commitment of the government private operator based on their business projections and calculation, already invests in 200 plates and glasses (here in investments already made by private operators to the tune of whopping US $ 15 billion) so that new people being fed are not disadvantaged and get excellent quality dal-roti (herein Qos).

The whole controversy today revolves around this issue of dal-roti (spectrum), now consider a scenario that today, the government says to the private players, that you have to feed 400 people to get 10 additional dal-roti. Earlier the commitment of the government was feeding fifty (50) people to get additional 10 dal-roti. So effectively the private players are now just left with 100 dal-roti in which they have to feed additional 400 more people. The private players are feeling cheated that the government has retracted on its original commitment to additional dal-roti and the former feels that even if they break the 100 dal-roti already with them (spectrum allotted to them) they will not be able to feed additional people (this is supported by host of global studies and parameters on spectrum utilization). So, in effect the private players investments on plates and glasses have gone waste and can even lead to bankruptcy.

This is one of the major causes of concern leading to all complicated spectrum tussle. I personally feel that the government can’t on an arbitrary basis increase the allotment of dal-roti after committing a due amount (as per license agreement).

Dal-roti Vs Burger (Dual spectrum allocation simplified)

The second issue hounding the media and people is allowing of cross over spectrum to other players. Here the scene is something like it, when the government had asked private players to feed people; the option was given to choose technology through which they will be feed people. Here some chose Dal-roti (GSM) and some chose Burger to feed people ( CDMA). So players choosing dal-roti were given GSM spectrum and players choosing Burger were given CDMA spectrum, as per rules allocated then.

The government had made it clear then, that people with Dal-roti will not be allowed to use burger and that using Burger will not be allowed to use dal-roti to feed people (that is DUAl allotment of spectrum was not allowed).

However, over a period of time the “Burger guy” realizes that Dal-roti is faring better with people (as 75 % of the population is using GSM technology) and burger is a losing proposition. So they ask government to allow them to provide dal-roti to people. And the government for reasons best known to them suddenly decides to give dal-roti to the Burger guy. This has led to all controversies relating to dal-roti (GSM) VS Burger camp (CDMA), the dal-roti guys are feeling cheated that on one side they are not given additional dal-roti to feed existing people and on the other side the government is looking at providing dal-roti to burger guys.

I personally feel that government has really shown haste and betrays ulterior motive at the pace with which dual allotment of spectrum has been allowed to favor a single CDMA operator (Burger guy).

And the whole thing looks like is aimed at providing "Special Concession to A Mobile operator" (in short SCAM a good acronym to describe the whole Dal-Roti-Burger controversy).


Amit said...

Thanks for the insightful article and analysis. I truly feel that these developments will hamper global investors confidence in India. Moreover, the government should not sit idle over the issue and act fast to resolving it, before its too late. This truly needs intervention of the highest level.

I hope its not a sad end to the great sucess that India has witnessed in the telecom space.


Amit said...

Thanks for the insightful article. I truly feel sad that a segment that has made India proud globally is being throttled just because of certain vested interest. If its true I feel governments invervention of the highest level is need to resolve this, before global investors confidence is hit.