Despite a flurry of reports this week in the India media suggesting as many as 12 3G operators in some regions in the country, a closer look at the government’s spectrum allocation policy yields a more realistic scenario plus areas for concern in some heavily populated cities.
According to the reports, the Indian government is planning to auction 3G licenses as early as this Friday. It has earmarked up to 60MHz of spectrum for 3G services. One Business Standard report reads, “Consumers to get 10-12 3G players per circle.”
The report cites the government’s policy to allocate 5MHz per 3G license, resulting in a maximum of 12 players for the regions, called circles, with 60MHz of spectrum, including Andhra Pradesh, Tamil Nadu with Chennai, Haryana, Karnataka, Kerala and Orissa. Other circles have between 21MHz to 54MHz of spectrum, according to the report.
What the reports failed to mentioned is the fact that 3G, in the form of WCDMA, requires at least 2 x 5MHz of paired spectrum in order to work. That would reduce the potential number of players in half. In addition, even 2 x 5MHz deployments are limited because it only offers operators a single layer network, without the possibility of deploying micro cells for capacity enhancements in high density areas.
According to technical specifications and recommendations from various vendors, an ideal deployment for 3G would require 2x 15MHz of paired spectrum because it allows operators to have three layers in their network, one for wide area coverage (macro cells), one for capacity improvements (micro cells), and one more for extending indoor coverage (pico cells). That would limit the optimum number of operators for circles with 60MHz of spectrum to two.
21MHZ FOR DELHI’S 17M POPULATION: More importantly, some highly populated circles have very limited spectrum for 3G services. According to the Indian reports, the available spectrum for the circle of Delhi, with a population of 17 million, is only 21MHz, enough to support a maximum of two operators with 2x 5MHz of spectrum, or a single operator with a two-layer network.
To put that into perspective, Hong Kong with a population of seven million has 140MHz of spectrum with each of the four 3G licensees operating with 2x 15MHz of paired spectrum and 1 x 5MHz of Service area 3G spectrum available MHz* Andhra Pradesh 60 Tamil Nadu with Chennai 60 Haryana 60 Karnataka 60 Kerala 60 Kolkata 54 MP 51 Orissa 60 Maharashtra 48 Mumbai 42 Punjab 40 West Bengal 30 Delhi 21 Gujarat 23 unpaired spectrum.
$518M MINIMUM FOR PAN-INDIA 3G LICENCE: According to sources cited by the Economic Times of India, the government has set a base price of Rs 2,200 crore (US$518m) for a pan-India 3G license. The base price for 3G licenses in individual metropolitan areas and Category A circles have been set at Rs 160 crores, while the license price for Category B and Category C circles will start at Rs 80 crore and 30 crore respectively.
At the same time, the government has also set out the price for WiMAX licences, according to the report. A pan-India WiMAX license will start at Rs 840 crore (US$198 million), while individual metro and category A, category B and category C circles will start at Rs 60 crore, Rs 30 crore, and Rs 10 crore respectively.
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