GSM Operators: United They Fight

Barely two months ago, Reliance dropped its colossus CDMA plans in the Indian mobile space with a thud, and a scared lot of GSM players huddled together in defense. That was Reliance Impact 1.

Slowly, the dust started to settle down, and GSM players could see Reliance’s
movements more clearly. And they realized that the best way of survival was
offence–through a common front. And that’s the beginning of a new phenomenon–the
Great Unification of GSM Operators. Call it Reliance Impact 2.

When
there is a common opponent, smart fighters unite. Never has one seen the GSM
operators so closeted together. A sense of brotherhood has showed up in every
move they made since late 2002. They talk, write jointly to the minister. They
defy the regulator together. They fight their court cases together. They
communicate their anguish through a common advertisement. They cut their prices
together. They share their networks. They even address the media together.

This phenomenon is indeed remarkable, considering that as many as four
operators competing against each other in almost every circle and metro. It is a
fiercely competitive market. On one hand, cellular operators have to play the
game of one-upmanship among themselves and yet put in a common bat against the
big guy hurling the demon ball from the other side.

The cellular market in India has grown at the rate of 80—85 percent, and
achieved a subscriber base of 10.4 million by end-2002. According to Cellular
Operators Association of India (COAI), the industry has grown from Rs 3,285
crore in FY 2000-01 to Rs 4,700 crore in FY 2001-02.

But with Reliance having shot the CDMA arrow, will the fast-growing cellular
industry start slowing down? That, today, is the billion-dollar question.

The stakes are very high. COAI estimates that there will be 120 million
mobile subscribers in India by 2008. In the course, the mobile subscriber base
is expected to leave behind the fixed phone subscriber base. The mobile is not
only being looked as a means to solve the lack of teledensity but as an enabler
of an information society. That obviously points to not only a market for voice
communication but data/multimedia as well. Here, one is talking of a
billion-dollar industry, which is all set to grow at a fast pace.

So, the operators are doing everything in their capacity to hold their
customers from churning out to CDMA players. The challenge is huge and everybody
is affected. Unity has automatically followed as a result. Individually, they
present at best a few million subscribers each, but jointly they are a 10
million-strong team to contend with. United they stand, divided they fritter
away their advantages. They know this fact very well.

Thus, the united fight is very much on. The two major objectives here have
been to match and even preempt the opposite party’s moves both at the
marketplace as well as in the corridors of power. And the way things are going,
this strategy seems to have already paid back its first batch of dividends
through the Supreme Court direction and the TRAI tariff order.

Pricing

For cellular phone consumers, the year 2003 has truly started off on a
celebratory note. On the second day of the new year, GSM cellular operators
congregated to announce one of the most aggressive tariff revisions in the
history of the industry. With immediate effect, cellular-to-cellular national
long distance (NLD) calls of 50 km and above became cheaper by 66 percent, from
the prevailing peak charge of Rs 9 per minute to Rs 2.99 per minute anytime.

This was a joint initiative by the major cellular operators, which have been
using Bharti Televenture’s NLD service IndiaOne as the common carrier for
cell-to-cell NLD calls. Though the offer of such arrangement was made by
IndiaOne to all cellular operators, the two major incumbent telcos BSNL and MTNL
did not join this arrangement. And the two responded five days later, with an
even more aggressive cell-to-cell NLD tariff cut after joining hands for
cell-to-cell long distance. While MTNL’s calls beyond 200 km got marginally
cheaper at Rs 2.90 per minute (both peak and off-peak) compared to the private
operators’ Rs 2.99 calls between 50 km and 200 km and calls under 50 km became
significantly cheaper at Rs 2.40/1.20 (peak/off-peak) and Rs 1.20 (both peak and
off-peak) respectively. BSNL’s tariffs, which are current under introductory
plans and hence has to be revised, remained more or less at existing rates
(which are already lower than private operators tariffs), except for calls
beyond 500 km. For calls beyond 500 km, it announced a new flat tariff of Rs
4.80 per minute, inclusive of airtime. Further, there were price cuts also by
BSNL for cell-to-fixed NLD calls.

Cellcos will have to either quickly ramp up on the benefits side or match Reliance’s tariffs

What all this meant was no matter where you call from and where you call to
within the reach of the cellular signal, if you are making a call from a
cellular phone to another cellular phone, the national long distance call
tariffs have become almost three times cheaper than what the earlier tariffs.

As a result, roaming has become somewhat affordable, thus enabling more and
more people to remain always connected through a cellphone.

But there was more to come.

Two weeks later, after an intense war of words and action between private
cellular operators on one side and the Wireless in Local Loop (M) operators and
the incumbent fixed operators on the other side, cellular operators again upped
the ante. There was a joint statement that all cell-to-cell incoming calls
(within the same network or across networks) would become free.

Soon after came TRAI’s tariff order of 2003, directing basic service
operators to hike their local call charges and cellular operators to make all
incoming calls free, including calls from a fixed or WLL mobile phone. A new
interconnection regime has also been ordered, wherein basic service companies,
including those operating WLL mobile services, will pay interconnection charges
for using the cellular last mile–a long-standing demand of the GSM operators,
who have been paying interconnection charges for using the basic service
providers’ last mile.

As
expected, by the first week of February, all the major cellular operators have
made major overall tariff cuts. Incoming calls from GSM mobiles, across almost
all networks, have been made free, while incoming call charges from fixed phones
and WLL phones have been set at Rs 0.50 per minute. That apart, there has been
drastic fall in outgoing call charges too, with some premium packages even doing
away with outgoing airtime charge as well. Pulse period for calls has also
undergone a migration from the existing 30 seconds to a minute. Cellular
operators also promise to do away with the 50 paise charge for calls from fixed
and WLL phones, once the new interconnection regime comes into force.

The Reliance Factor

Cellular service providers have never been so forthcoming as they are now.
In the past, though tariffs have come down from the Rs 16 per minute levels of
1996, they have never cascaded so drastically–all at once. The difference
between now and then, obviously, is Reliance.

WLL mobile services have been there in the country for some time in the form
of MTNL’s Garuda. It was however, the entry of the big private sector
corporates Reliance and Tata into this service that set off the panic button in
the cellular services camp. Suddenly, the alternate mobile service threat was a
reality.

While the cellular operators see the entire WLL (M) industry as a threat, it
is Reliance which has really imprinted itself in their psyche. Yes, the Tatas
are big too. But it is the Mukesh Ambani-run Reliance Infocom whom they are
watching all the time. Why this profound impact?

Grandiose as Reliance’s product, distribution and promotion plans are, it
was its pricing strategy that shook up the industry in the initial phase. Going
from the price positioning that it has taken, the nimble giant seems to have
taken great care in evolving its pricing strategy.

While other WLL players have chosen to position themselves as cheaper mobile
phone services in terms of pricing, Reliance has positioning itself as the ‘cheaper
and as-good-as cellular’ mobile service. Unlike others, Reliance overtly
promotes such value-added features as inter-SDCA number facility, SMS,
multimedia services, Internet access, and games. The idea clearly is to be as
competitive as the GSM cellular operators when it comes to consumer benefits–real
or perceived.

The Value War

What we are witnessing today in the Indian mobile market is not exactly a
price war. It is in fact a value war that is throwing us all the goodies that
have come so far since the launch of WLL mobile services.

Value is nothing but benefits minus cost–not what the service provider
estimates but what the consumer perceives.

Therefore, the greater the perceived benefits and the lower the price of a
service, the higher is the customer value and more are the chances that
customers will choose that service.

The current mobile pricing strategy adopted by Indian mobile operators can be
explained in a simple manner by mapping the various players on a value map.

The horizontal axis of the value map shows the customer-perceived benefits of
the services offered while the vertical axis plots the price of the service as
perceived by the customer.

In a scenario where market shares are more or less stable, as was the case of
cellular industry, competitors align themselves in a straight diagonal line from
the point of origin, which is called value equivalence line (VEL). Depending on
what benefits the customer wants at what price, the customer makes a logical
choice. The consumer decides whether to choose a private cellco and pay a
premium for the better perceived benefits they provide or go for MTNL/BSNL to
enjoy the cheaper tariff.

WLL companies like Tata Indicom, BSNL, MTNL, HFCL, Shyam Telelink seem to be
clearly positioning their services truly as the poor man’s mobile, setting
their tariffs significantly lower than the cellular operators, right at the
bottom level of fixed phone services. They are mainly targeting the mass market.
They are betting on the hope that majority of new phone subscribers would choose
to take up a mobile phone rather than a fixed phone for their personal
communications. These companies, while being at the same price level as fixed
phone services, have an advantage on the perceived benefits due to the mobility
factor. Because of this, they hope to gain marketshare from the fixed phone
operators. Cellular operators are not that threatened by this group of players.

On the other hand, it is Reliance that is sending the shivers down the
cellcos’ spines. Reliances’ position is that of matching the fixed operators
on price and matching the cellular service providers on perceived benefits. Now,
that is the real cause of the incumbent mobile operators’ worries. If the
customer perception matches what Reliance has set forth to do in its
price-benefit mix, then it means that the company would capture marketshare from
not only the fixed phone operators but also the cellular service companies.

So either the cellcos have to quickly ramp up on the benefits side or match
Reliance’s tariff apple to apple. The catch-up activity has already begun on
the price side. How far they can go, however, remains to be witnessed.

Nareshchandra Laishram

Lobbying

Lobbying

The Cellular Operators Association of India (COAI) has established itself as
one of the most efficient lobbying machines in corporate India. Under its able
banner, the industry had successfully got a major concession from the
government, when the industry was allowed to migrate to a revenue-sharing regime
from a fixed licence system. On several occasions, it has been able to solve
highly contentious issues with the incumbent monopolies, with the government,
and with various other communications service sectors.

The launch of WLL mobile services has once again given COAI a call to do what
it does best–lobbying. This time, the issues are very serious, and the risks
of failing are threatening as never before. And most significantly, the
opposition is equally powerful this time.

COAI
has three main objectives. One, to prevent WLL service providers from operating
mobile services. Two, to limit the WLL players from offering features that a
full-fledged mobile service can offer. And three, to get all the concessions it
can get vis-à-vis the licensor, the incumbent operators and the other service
providers.

With these objectives, the cellular industry has opened the Pandora’s box.
A barrage of new issues have emerged apart from several long-standing matters
getting re-highlighted.

Limited Mobility

Cellular operators feel that the biggest threat to the growth and
investments in the mobile sector is the uncertainty created by allowing fixed
service operators to provide WLL (M) services. Not satisfied with TDSAT’s
decision allowing fixed service providers to offer the WLL (M) service, the
cellular industry took the matter to the Supreme Court.

On
December 17, 2002, the Supreme Court decision said, "We accordingly set
aside the same and remit the matter to the tribunal for reconsideration with
special emphasis on the question of level playing field, on the basis of
materials already on record, after hearing the counsel for the parties concerned
… Needless to mention the fixed service providers will be bonded by the
ultimate decision to be given by the tribunal."

Now, with the WLL (M) case coming back to TDSAT, the tribunal has decided to
review the case from 24 February 2003 onwards. It seems that TDSAT will pay
special emphasis on level-playing field conditions.

The cellular operators are just stopping short from saying that their view’s
have been vindicated. They now are highly confident of getting level-playing
field.

V5.2 Interface

COAI has insisted from the very beginning that fixed service providers
should be allowed to use V5.2 interface and not A+ interface. With V5.2, feel
industry experts, basic service providers cannot load more than 60,000
subscribers in a metro circle with the given spectrum, without increasing the
capex to a sizable extent. Also, calling line identification (CLI) and other
value-added services cannot be offered with V5.2.

On 5 March 2002, COAI had filed a petition before TDSAT to ensure
implementation of the V5.2 interface as prescribed by TEC or an improved version
supporting PSTN architecture only. The TDSAT adjourned the hearing of the case
from time to time as the basic issue regarding limited mobility was before the
Supreme Court. In the meanwhile, the TDSAT had issued status quo saying that
basic service providers should ensure that the decision of the government dated
25 January, 2001, which reads as follows:

"The basic telephone service licensee may provide handheld telephone
sets to its subscribers with wireless access systems subject to the condition
that mobility with usage of handheld telephone sets shall be restricted within
the local area i.e. the SDCA in which the subscriber is registered. While
deploying such systems, the operator has to follow numbering plan of the SDCA
and it should not be possible to authenticate and work with the subscriber
terminal equipment in SDCAs other than in which it is registered. The system
shall also be so engineered as to ensure that handing over of the subscriber
does not take place from one subscriber to another SDCA while
communicating."

After the Supreme Court decision on WLL (M), the cellular operators moved
another application in TDSAT that Tata and Reliance were violating the status
quo order of TDSAT. TDSAT clarified the status quo order and directed DoT, TRAI
as well as operators to comply with license terms and conditions.

The TDSAT hasn’t yet fixed any fresh date for the V5.2 case. It seems that
TDSAT will look into this case after looking into the WLL (M) case reverted back
to it from the Supreme Court.

The V5.2 issue is very crucial for both cellular and basic service providers
and whoever wins will have an edge over the other.

Access Charge

GSM operators have been saying that interconnect agreements are
discriminatory in nature. While they pay Rs 1.20 for calling a fixed line
operator the WLL (M) subscriber does not have to pay anything. As a result,
cellular services are more expensive than WLL (M) services. GSM operators also
say that they were unable to implement the calling party pays (CPP) model
because of the access charge.

Recently, cellular service providers denied interconnect to WLL (M) providers
like Tata Teleservices and HFCL, and reiterated that they were willing, able and
ready to provide immediate interconnection to any or WLL (M) operators based on
reciprocal commercial interconnect agreements. With this, they were trying to do
two things. One, pressurize the regulator to look into this matter at the
earliest, and two, stop the march of WLL (M). It can be said that they have
succeeded party, considering the fact that private fixed service providers were
able to add only 14,498 WLL (M) connections in the month of December 2002.

It was only after the then minister of communications, Pramod Mahajan,
assured them of reviewing the level-playing field issues by requesting TRAI to
finalize a ‘just and fair’ interconnection framework at the earliest, that
cellular operators agreed to restore interconnect with WLL (M) operators as an
interim measure.

TRAI hurriedly announced the 24th Amendment to Telecommunication Tariff order
and Telecommunication Interconnection Usage Charges (IUC) Regulation, 2003 (1 of
2003). The amended tariff and interconnection charges are applicable from 1
April 2003, whereby cellular operators have to pay an access charge of Rs 0.50
per minute for fixed line calls in metro areas and Rs 0.60 (plus transit cost)
per minute in the case of circle areas. For WLL (M) calls, cellular operators
have to pay an access charge of Rs 0.30 per minute in metros and Rs 0.40 (plus
transit cost) in case of circles. At the same time, fixed line operators have to
pay an access charge of Rs 0.30—0.40 per minute for calls terminating on the
cellular networks. WLL (M) service providers will also have to pay a similar
access charge of Rs 0.30—0.40 per minute for calls made to cellular networks.

All this will lead to extra revenues for cellular service providers. However,
in the bargain, they have to provide free incoming calls without charging
anything extra. With the imposition of access charge for calls made to cellular
and fixed line from WLL (M), the difference between cellular and WLL (M) tariffs
will decrease. This will give GSM operators some reason for cheer.

License/Entry Fees>>>>>>>>>

Cellular operators say that they have paid much higher entry fees as
compared to that paid by basic service operators offering WLL (M) services. Let’s
look at the statistics in the post-NTP ’99 and pre-NTP ’99 contexts.

Post NTP ’99, cellular service providers have paid an entry fees of Rs
1,633 crore and a performance bank guarantee of Rs 250 crore. This totals to
around Rs 1,833 crore for 17 licenses whereas basic service operators have paid
entry fees of Rs 768 crore and a performance bank guarantee of Rs 3,072 crore, a
total of around Rs 3,840 crore for 25 licenses. So, post NTP ’99, basic
operators have paid more than cellular service providers.

Pre NTP ’99, cellular service providers have paid Rs 7,300 crore for 42
licenses whereas basic service providers have paid Rs 1,600 crore for six
licenses.

Thus, in total, cellular service providers have paid Rs 9,133 crore whereas
basic service providers have paid Rs 5,440 crore, which has a substantial amount
of performance bank guarantee of Rs 3,072 crore.

Here, the response of the licensor could be that the license/entry fees looks
okay, considering the fact that more licenses were issued in cellular services
than in basic services. Even rollout obligations in basic services are more
stringent.

Revenue Sharing

Cellular operators have been complaining that they have been paying 35-42
percent of their revenues by way of high levies and costs like license fees,
interconnection charges, spectrum usage charges, and service tax. Their demand
is to reduce the revenue share from the existing rate of 12 percent for category
A, 10 percent for category B, and 8 percent for category C circles. They point
out that reductions in revenue sharing will help them increase their profit
margins and there is a possibility that some of the benefits will be passed on
to subscribers.

This will be a welcome thing, if it comes through. However, this benefits the
fixed service providers also, as the same kind of revenue share is likely to be
applicable to them as well.

Spectrum

COAI is of the view that cellular operators are operating with suboptimal
spectrum as a majority of them has 6.2 MHz. In Delhi and Mumbai, operators have
8 MHz each. The suboptimal spectrum allocation increases the capital expenditure
and also affects the quality of the network if one is not investing in more base
stations. COAI has been quoting international examples whereby the average works
out to be 2*17 MHz per cellular operator. The matter is currently under review
by the Department of Telecom.

An increased frequency spectrum will help cellular service providers to
minimize capital expenditure, so that they can lower the cost of services and be
more competitive vis-à-vis WLL (M) services.

It seems that the spectrum issue will take time to get resolved as the
defense sector is sitting with lot of spectrum. One solution is that the
government takes the existing frequency bands from defense and offers it other
frequency bands.

Pravin Prashant

Joint Industry Development>>>>>>>>>>>>>>

The cellular industry has been one of the best examples
of joint industry development. The operators know there is a huge market ahead
of them–so, the benefit of growing together has been larger than competing
against each other. In Cellular Operators Association of India (COAI), the
industry has not only the country’s most aggressive vertical-industry liaison
unit but also a well-oiled initiator of joint business development and promotion
activities. This organization has shown the way to all other associations how
industry data is collected and presented. COAI’s subscriber tracking mechanism
is certainly among the best in the world. Though not sacrosanct, the monthly
cellular subscriber base that it tracks is confidently cited internationally by
the government, industry, media, financial analysts, banks, and regulators. GSM
India, the India interest group of GSM World (the premier global GSM industry
association) has also been there for some time, doing some work on the common
technology and operational fronts.

While COAI fights the case against WLL, GSM operators have to worry about the interim period before the court cases are decided

The Reliance Trigger

Just when things were coasting along, the cellular boat was hit by the wave of
WLL mobile services. While overtly the WLL players were playing the
affordability and limited mobility card to introduce mobility, the technology
that they were using for mobility was by no way limited in any sense. CDMA
worldwide has been known to compete well with GSM as a mobile technology, though
it is a newer technology and has not been implemented as extensively as GSM. And
this fact did not take long for consumers to learn. Today, it is quite implicit
among the service providers as well as customers that WLL mobile is as good as
cellular. Everybody knows quite well that it is the regulation and not the
technology that’s keeping CDMA from unleashing a whole array of value-added
features that are similar and in some cases better compared to features provided
by GSM.

The cellcos are fighting hard to keep WLL’s wings
clipped. But their confidence is greatly eroded by the fact that the biggest
Indian private sector company, a master in lobbying and influencing, is also in
the fray. The Reliance camp has also been proactive in projecting the major
benefits of CDMA technology. Unlike others, it has gone ahead with a campaign
that does not seem to be affected at all by existing regulatory norms about
limited mobility. Its army of Dhirubhai Ambani Entrepreneurs (DAEs) is going
ahead with spreading the word around that there is nothing in the WLL licence
that prohibits such CDMA features as Internet browsing, multimedia, e-mail,
gaming, applications–precisely the things in which CDMA is perceived to score
over GSM. The Reliance camp already seems to be convinced that it is just a
matter of time before these things are allowed in WLL mobile.

Taking on CDMA

It is this confidence of Reliance that is the most worrying aspect for the GSM
industry. And the joint industry development activities of GSM operators have to
be seen in this context. While COAI fights the case for stopping the
introduction of WLL mobile services, GSM operators worry about the interim
period before the cases are decided.

COAI is taking on the promotional activities in
addition to what it did earlier. It has taken every opportunity to put across
the fact that the cellular industry has been the star performer of the
communications sector, having established a 10 million subscriber base in quick
time and bringing in almost 50 percent of the Rs 43,000 million cumulative FDI
into the telecom sector since 1993. Also, the organization has been playing on
the consumer’s emotions by bringing out advertisements to that effect–an
example being that of pleading for justice in the case of interconnection on
behalf of 10 million mobile consumers.

The GSM Supplier Association (GSA) came to India,
holding their first seminar in December 2002. The agenda was to put to
perspective the competitive advantages of GSM over other mobile technologies.
The seminar identified SMS, roaming and scale of volumes as major advantages of
GSM. The core message was, "It is vital that India is able to capitalise on
the extended value proposition that GSM can deliver today and in the near
future."

GSA also announced the setting up of GSA India chapter
which will spearhead the joint promotional activities of the GSM technology and
solutions provided by the vendors.

Individually too, cellular service providers have been
trying their best to remind their customers that they would be bringing down
their prices. SMS have been sent to that effect and the company executives have
made public statements saying that cellular service providers would match the
WLL mobile tariffs, provided there is level playing field. After the early days
of 1996-97, relationship marketing is back.

COAI to Play Bigger Role

Though COAI has been proactive in carrying out its regulatory and liaison
functions, it has not gone beyond the basic data collection and occasional
promotion work. It has to focus on activities that it has listed out as its
objectives. These includes studying industry best practices, facilitating
enhancement of standards and quality of service, continuous effort to ensure
customer satisfaction. The COAI can take a leaf out of NASSCOM which does an
excellent work of doing market research, forecasting and events towards
promoting Indian software industry.  

Nareshchandra Laishram

Infrastructure sharing>>>>>>>>>>>

Network sharing is very prevalent in Europe, where
operators have paid huge licences fees. As a result, several high-profile
sharing deals have been made. In Germany, multiple operators have built common
network right from the scratch. The biggest

infrastructure sharing deal has been between BT and Deutsche Telecom–which
share common networks in UK and Germany. Vendors like Nokia have also developed
multi-operator radio access equipment to facilitate network sharing.

Real estate for base stations and backbone towers can be shared without much fuss to begin with

In a highly competitive mobile industry like India,
where price wars are the order of the day–reduction of capex and opex assumes
critical importance. Like Europe, the cellular industry in India operates in an
expensive licence regime where thousands of crores of rupees have been paid to
obtain licences. Also, the country’s large geography makes it a tough
challenge to cover the various cities, towns and villages with cellular
networks. In this context, infrastructure sharing among cellular operators is
the way to go about to not only expand rapidly but also be at a competitive
advantage.

However, while the benefits of sharing can be high, the
risk of not being able to distinguish one’s service from the other is also
real. Perhaps this is the reason why in India, despite having multiple cellular
service providers in each operating areas–a total of 68 networks are
operational in the country–the opportunity to share the network has not been
explored widely. There are exceptions starting to happen, though. The entry of
the third and fourth operators has somewhat made some operators look at this
option.

COAI has proposed that cellular operators share their
core wireless network infrastructure as well. Real estate for base stations and
backbone towers can be shared without much fuss to begin with. And going ahead
such resources as switches and access radios which form the crux of a cellular
network can also be shared. Two alternatives for sharing costs are envisaged.
For a greenfield project like the fourth operator networks, the capital
expenditure can be equally shared by the operators. In case of the operational
expenditure of maintaining the sites, one of the operator can do the maintenance
while the cost can be shared in a ratio negotiated by the operators.

In case of infrastructure sharing with an existing
site, the new operators can be charged for sharing the network by arriving at an
operational cost taking into consideration the initial capex of the existing
network, depreciation, and maintenance costs.

This will allow faster rollout of new players and
create additional revenues for incumbents.

COAI’s proposal already seems to be paying dividends.
By striking a strategic alliance, AirTel has taken the help of Escotel’s
infrastructure in Kerala to quickly start its services in the state. The two
have agreed to share each other’s networks in states where both have
operations. Currently, Escotel can also make use of AirTel’s operational
network in Himachal Pradesh. The sharing involves co-location of antennas with
both operators taking the burden of the operational costs together. Under the
sharing system, multiple antennas can be located on a tower with a distance of
one meter to get proper signal for all operators.

Other operators are also known to be exploring this
option. It is being seen as a win-win situation for both incumbent mobile
operators as well as the new entrants.

Another significant case of infrastructure sharing
among the cellular operators in India has been that of using the same long
distance carrier to route their national long distance mobile calls. Almost
every cellular service provider in India today uses Bharti Tele-ventures’s
long distance network, thus allowing them to lower the tariffs of long distance
calls. A tariff cut in this respect has already been announced and further
cell-to-cell call benefits could come for customers due to this sharing
arrangement.

Sharing in the Future

The sharing of cellular infrastructure in India is still a wide open area. Apart
from sharing of towers, not much resources are being shared by operators. Areas
like sharing of transport equipment, switches and even radio frequencies assumes
great importance if the cellular industry has to achieve the tall targets of 120
million by 2008 that it has set for itself.

Today, cellular networks are more
concentrated around cities and major towns. Tomorrow, they will have to further
expand into the interiors of the country, touching even the villages. All this
means expensive rollout requirements which run into billions of dollars in capex.
Already, there are networks that are waiting to be filled up. Instead of waiting
for subscribers to come and make use of it and pay for it as a result, it makes
sense to present ones’s network as an outsourcing opportunity for other
cellular companies which are setting up networks. This would save a huge amount
of money for the new network providers while bring in new revenues for the
existing network owners.

Spectrum availability has also been in
news frequently, with cellular operators complaining of clogging of their
spectrum in several pockets. But, it is also a fact that the spectrum that they
have been allocated for regions where the traffic is not so much are not being
fully utilized. This idle spectrum can be put to use in future, if it is shared
with another operator who does not have adequate frequencies or is awaiting for
sanction of frequencies. Technologies that enable such sharing are already
available.

Nareshchandra Laishram