Cellular Spectrum Refarming, Spectrum Pricing, Analysis and Recommendation

Nepal Telecommunication Authority Magh, 2065 (Feb, 2009)

1

Key Issues in Refarming

Demand in Spectrum High Operators occupy spectrum inefficiently, and are reluctant to surrender extra spectrum 3G bandwidth is limited due to improper spectrum assignment

Spectrum Demands
Nepal Satellite requests to increase assigned bandwidth UTL requesting one additional carrier in CDMA800 band for EVDO operation STMs request for 2x5 Mhz for its WLL services Smart Telecom request for spectrum for WLL
3

Need for Spectrum Refarming

Current Spectrum Assignment method is ineffective and inefficient Refarming Goals
Utilize spectrum efficiently Make spectrum available to needy ones Reorganize 3G spectrum

Available Cellular Spectrum

BANDNAME CDMA800 GSM900 EGSM FREQUENCIES 824~844 Mhz 869~889 Mhz 890~915 Mhz 935~960 Mhz 880~890 Mhz 925~935 Mhz BANDWIDTH 2x20 Mhz (2x16 Mhz Available) 2x25Mhz 2x10 Mhz (2x2.4 Mhz available) Limited to 5 Mhz as a result of overlap with CDMA. Out of 5 Mhz, 2.6 Mhz considered as guard band Limited from 2x75 Mhz to 2x45 Mhz due to CDMA 1900 band use Now occupied by UTL. Need to vacate it for GSM If CDMA is vacated, it can be 2x60 Mhz (1920~1980, 2110~2170 Mhz) 5 REMARKS 4 Mhz Overlaps with EGSM

GSM1800 CDMA1900 IMT2000 (3G)

1710~1755 Mhz 1805~1850 Mhz 1850~1880 Mhz 1930~1960 Mhz 1960~1980 Mhz 2150~2170 Mhz

2x45 Mhz 2x30 Mhz 2x20 Mhz (Could be 2x60 Mhz)

Current Cellular Spectrum Paired Assignment (Mhz)

CDMA 800
Allocated Band Operator

GSM 900 25 7.2+2.4* +2.4* 6+2*

EGSM 900 5 -

GSM 1800 45 9+6* 9+2*

CDMA 1900 30

IMT 2000 20 10 10

Total 141 45 29 13 18.4 5.6

16 8

NDCL SNPL UTL NSTPL STM

3 5 4.4 2.4 2.6

Guard band

10 9 3
Guardband

Total Grand Free Band

16 0

24.4 0.6

5 0

38 7

10 20

20 0

113.4 27.6

Note:

Only one side of the duplex Bandwidth is shown in the figures to minimize space in the table.

* Temporary Assignment
6

Spectrum Refarming Objectives

Vacate Spectrum from
NDCL: 2x4.8 Mhz in GSM900, 2x3 Mhz from GSM1800 UTL: 2x10 Mhz from CDMA1900 SNPL: 2x2Mhz in GSM900

Enhance available bandwidth by

Increasing GSM1900 Mhz bandwidth from current 2x45 Mhz to 2x75 Mhz, Releasing 2x6.8 Mhz in GSM900 and 2x3 MHz in GSM 1800 MHz Increase 3G spectrum from current 2x20Mhz to 2x60Mhz

Retain released bandwidth in a POOL for need based assignments.

Refarming Initiatives
NTA engaged Consultant to review spectrum management Consultant recommendation for Refarming NTA issued consultation paper in this regard.
8

Comments on Refarming
NDCL:
Not possible to release, Will restrict expansion Will degrade quality,

SNPL:
Difficult to vacate in short time will delay development activities Will divert resources intended for development

UTL: Desires to acquire GSM band once unified licensing regime is introduced Experts Opinion:
Use strong fiscal instruments to discourage spectrum hoarding.
9

Analysis and Findings

10

Key Findings
Spectrum Hoarding Tendencies
No costs at all to reserve and hoard spectrum Need to pay only upon usage No guarantee to obtain spectrum when needed.

Instruments to address these tendencies

Simplify Pricing formula Establish Proper Spectrum Assignment Policy/Criteria Increase Spectrum Usage Charges Set extra fees for spectrum Hoarding
11

How to Discourage Spectrum Hoarding?

Set Standards for Spectrum Allocation
Minimum No of Subscribers per MHz Minimum Revenue to be generated per Mhz Determine minimum spectrum necessary to provide the services Regard excess spectrum as Hoarded Spectrum

Set spectrum prices according to its real value to Operators

Price spectrum for Reservation and not use. Fixed Rates e.g. Rs/Mhz Variable Pricing: % of Revenue Mixed Pricing: combination of both (as suggested here)

Set Premium prices for Hoarding Revoke hoarded spectrum if kept unused for over 2 years.
12

Basic Considerations For Spectrum Assignment 1

Available cellular spectrum (2x120 Mhz) must support at least 80% of national population.
Thus Each 2x1 MHz bandwidth must support around 0.7 % of the population. Considering Nepals population to be 30 Millions, Each 2x1 Mhz must support 200,000 potential customers, i.e. 100,000 customers/Mhz

13

Basic Considerations For Spectrum Assignment 2

Smaller spectral bandwidths are less efficient.
For an example, 60 % increase in GSM Bandwidth (e.g. from 2x6 Mhz to 2x10 Mhz) results in 135 % or more in subscriber capacity (subs/Mhz)

Applicability and capacity of frequency bands:

Low frequencies (e.g. GSM900 and CDMA800) offer four times more coverage than higher frequencies (GSM1800 or CDMA1900). Low frequencies better suited to low population density e.g. rural areas, High frequencies better suited for high population density population areas
14

Basic Considerations for Spectrum Assignment - 3

CDMA offers more capacity (subscribers/Mhz) than GSM Number of Subscribers Supported by each 2x1Mhz depends on Network size (frequency bandwidth, number of BTS and TRS/BTS and traffic per subscriber
Typically, it may vary from 60,000 to 300,000 in case of GSM, and to 450,000 in case of CDMA

Spectrum Assignment Criteria

Subscriber Base criteria suitable to promote Penetration, Revenue base criteria suitable for high traffic networks.

Revenue Base criteria defined as

Bench marks based on Number of Subscribers x Typical Average Revenue per subscriber (ARPU )
15

Some International Practices in Spectrum Assignment

Bangladesh: India: Pakistan: Average:
Asian Global average:

Max. 2x21.5 MHz/Operator Max. 2x15 MHz/operator Max 2x13.6 MHz/operator

<2x15MHz/operator 2x22 MHz/operator

(Grameen Phone for over 20 million Subscribers)

Lessons
Need to set limits to spectrum assigned to a single operator Must define criteria for spectrum assignment
16

Subscriber and Revenue base Criteria for Spectrum Allocation

Subscriber or Revenue Based Criteria for assignment of GSM and CDMA spectrum (as preferred by operator)
Criteria for GSM Bandwidth (Mhz) Subscriber Base ('000) Revenue Base Rs. ('000 ) Bandwidth (Mhz) Subscriber Base ('000) Revenue Base Rs. ('000 ) 2x2.4 150 540,000 2x9.6 2,000 7,200,000 2x4.4 500 1,800,000 2x6 900 3,240,000 2x7.2 1,200 4,320,000 2x15 4,500 16,200,000 2x8 1,400 5,040,000 2x9 1,800 6,480,000

2x11 2x12 2,500 3,000 9,000,000 10,800,000

Criteria for CDMA

Bandwidth (Mhz) Carriers Subscriber Base ('000) Revenue Base Rs. ('000)
See note overleaf

2X2.5 2X3.75 2X5 (2 carriers) (3 Carriers) (4 carriers)

2X6.25 2X7.5 2x8.25 (5 Carriers) (6 carriers) (7carriers)

500 1,800,000

800 2,880,000

1,200 4,320,000

1,700 6,120,000

2,500 3,500 9,000,000 12,600,000

17

Notes on:
1. 2. 3. 4. 5.

Subscriber and Revenue base Criteria for Spectrum Allocation

Bandwidth shown in the table is the sum total of bandwidths assigned in

different frequency ranges for the same type of services (GSM or CAMA)

Subscriber Base: These are the figures of active subscribers (VLR) averaged over a month. Revenue Base: Audited Annual Revenue The spectrum allotment: based on carriers numbers (2x1.25 Mhz for CDMA and 2x1.2MHz for GSM) subject to availability of spectrum. Calculation of Required bandwidth in GSM between 2x12 Mhz and 2x15 Mhz may be done as follows: Let the subscriber number be: 3,700,000. The essential bandwidth is: 2x[12+(15-12)/(4,500-3,000)*(3,700-3,000)] = 2x13.4 Mhz =26.8 Mhz

5.

GSM bandwidth taken as next higher multiple of 2x200 Khz (1 carrier), and CDMA of 2x1.25Mhz (one carrier)

These Figures are very relaxed compared to DOT India Criteria for A and B circles as given in the annexes: ref. DOT Order No. J-14025/200(17)/2004-NT
18

Spectrum Pricing
Spectrum is very precious All countries charges spectrum on

Reservation or Holding
Charged only if used.

Spectrum not properly valued yet in Nepal

No charge at all on holding,
No charge to NDCL Where spectrum is charged, it is less than Rs 0.75 millions/Mhz/Year or less than 2.5 paisa per Mhz per year

(probably the lowest in the world)

19

Current Spectrum assignment and pricing

Operator Current Subs base (000) Spectrum Assigned (Paired Mhz) Possible subs base with the spectrum (000) Spectrum required for current service (Paired Mhz) As of Jan 08 Spectrum Fee adds up to Rs Millions per Mhz Used Spectrum as a Proportion of Assigned spectrum Proportion of customers supported against possible

2G and 2.5G spectrum Usage (Ordinary mobile and or WLL with or without mobility) NDCL SNPL UTL NSTPL STM NDCL SNPL 2,860 1,720 117 0 0 NA NA 2x35 2x19 2x12.5 2x18.4 2x2.4 2x10 2x10 12,000 5,700 6,500 4,900 200 2x14.15 2x9 2x2.5 0 0 N/P 0.74 0.1 0 0 0 0
*

40% 47% 20% 0 0

24% 30% <2% 0 0

approx.

3G Spectrum Usage (Price not yet defined)

Note:

* Calculated as a ratio of Rs 28 millions per 2x19 Mhz N/P: does Not Pay NA: Not Available,

20

Spectrum Pricing- Examples

Three methods are in practice Fixed : Rs/Mhz/Year Variable e.g. % of annual revenue Mixed: A combination of the Two above 1 Fixed Price Scheme
Pakistan sold, through auction, 2x13 Mhz band for US$300 millions for a period of 15 years, which comes to:

Rs 50 millions/Mhz/year
Bangladesh auctioned spectrum at 800 million takas/Mhz, which comes to:

Rs 25 millions per Mhz/year

21

Spectrum Pricing- Examples

2

(Contd..)

Variable pricing

Most common is as a % of Adjusted Gross Revenues

From 2 % upto 6% in India, depending upon network size 5% in Hong Kong

Nepal and Thailand charge by counting TRX units

(Thailand has strict rules for time-bound deployment of systems or revoke spectrum)

Mixed Type
e.g. Australia

22

Considerations for Spectrum Pricing

-2G & 2.5 G

Consultants suggest comparison of spectrum charges based on annual Price per Mega hertz per Population (PMP) PMP vary from country to country and are mostly in the range from Rs 0.5 to Rs 5/Mhz/Population/year (some countries have even much higher PMP figures) Indian charges add up to around Rs 0.67/Mhz/Year
(derived from 6% of annual revenue of comparable operator in Nepal)

For Nepals population the charge @ Rs0.5 to Rs 5 it comes to around

Rs 15 millions to 150 millions/Mhz/year

23

Spectrum Pricing Practices -3G

Asian Average: European Average: India intends to charge
Only Beauty Contest Lowest charge by Sweden:

Rs 2.5

Rs 16.0/Mhz/Pop Rs 68.0 Rs 14.5 Rs 2.5

Nepal has not yet set any fee fro 3G Spectrum

If Rs 1.5/Mhz/Pop is adopted for Nepal, It will be then Rs 45 millions/Mhz/Year

Intends to earn through auction $ 6 billions total for new operators For existing operators levy a one time Charge and additional 1% in the revenue sharing for spectrum fee )

24

Pricing Instruments - Options

Fixed Spectrum Prices Variable Prices Mixed Method. Usage Based Charges Holding Charges (relatively higher)

25

Features: Fixed Pricing

Fees based on Reservation/Holding Paid annually as Rs/Mhz Advantage Encourages Efficiency
promotes frequency Re-use and encourages multiple base stations

Disadvantage Difficulties for small operators

26

Suggested Pricing Option 1: Fixed Pricing

Price set fixed as Rs per Mhz (sum total of bands in FDD and TDD) Price/Mhz = BW*R *** Here,

BW : Frequency Bandwidth (sum of both sides of duplex bandwidths in case of FDD) R : Rate = Rs 1.4 Millions/Mhz/Year now and increasing it annually to Rs 15.0 Millions/per year in 5 years time.

:Frequency Band Coefficient 2,1,3 for low, high and 3G spectrum

: Geographic coefficient ( 1 for all Nepal, 0.9 for Kathmandu, 0.3

revenue based criteria, 5 for excess I.e. hoarding)

: Frequency Usage Factor (1 for use defined by Subscriber or

for Rural Area, 0.5 for FWDR and/or MWDR, and 0.75 for any other option excluding Kathmandu

27

Features: Variable Pricing

By counting TRX used as in Nepal
Very difficult to keep track of stations and so difficult to determine the fee

Revenue Based
As a % of Revenue Is simple to calculate and favorable to small operators

Disadvantages:
Does not put price on Reservation/Holding/Hoarding Encourages Hoarding

28

Suggested Pricing Option 2: Fee as a % of Revenue

This Method was suggested by International Consultants Annual Charge = % of Revenue x Coverage x Development factor x Bandwidth Coefficient x Regional Incentive
Item % Revenue Coverage Dev. Factor Definition Operators revenue from service CDMA WLL 2%, GSM 5% % of Population Takes into consideration different stages of development: 1st 2 Yrs 0.1, then gradually to 1 in 6 years WLL: 1/30xBandwidh, GSM: 1/7.2xBandwidh Kathmandu 1, EDR 0.75, central and western Nepal 0.25 Suggested Value 2% ~5% Max 100% 0.1,0.4, 0.6, 0.8, 1 1 through 6th yrs 0.033 ~ 1 1, and 0.75, 0.25

Bandwidth Coef. Regional Coef.

Comments: Does not support usage, No need now to differentiate WLL and GSM
29

Option 3: Mixed Spectrum Pricing

Combines positive aspects of both pricing mechanisms:
Variable pricing for spectrum usage essential to support the offered service Fixed Higher Pricing for Spectrum occupied without using (Hoarding Charges)

Offers a unified approach for both 2G/2.5G and 3G spectrum prices by adopting a single formula
30

Mixed Pricing Proposed Formula

AnnualSpectrumFeeofCellular ( Rs) = [ P] x[ AGOR]x (2 BWL + BWU + 3BU 3G ) + Rx( BWT BWE ) x [ ] BWT

Where P: Percent figure taken as 1 % which should gradually be increased to 4% AGOR: Annual Gross Operating Revenue BWE: Bandwidth Essential for the service, determined For 2G and 2.5 G as per the earlier defined subscriber/revenue linked criteria For 3G taken as 2x5 Mhz Total Bandwidth is the sum of the two. BWL: Total Spectral Bandwidth in Lower Frequencies (e.g. CDMA800 and GSM/EGMS900) BWU: Total Bandwidth in Higher Frequencies (e.g. CDMA1900 and GSM1800). BW3G: Total Bandwidth in 3G spectrum BWT: Total Bandwidth Assigned to the operator = BWL +BWU+ BW3G R: Annual Rate of Spectrum Charge (Rs./MHz) for Extra Bandwidth, R= Rs. 7,000,000/Mhz (For TDD nominal bandwidth, and for FDD sum of transmit and receive bandwidths, e.g. for 2x6Mhz block the bandwidth is 12 Mhz). R should be gradually increased to Rs 28 millions/Mhz/year in next 5 years : Regional Coefficient: 1 for all Nepal, 0.9 for Kathmandu, 0.3 for Rural Area, 0.5 for FWDR and/or MWDR, and 0.75 for any other option excluding Kathmandu
31

Conclusions
1.

2.

3.

4.

Assign spectrum based on defined criteria: Subscriber or Revenue criteria, whichever is favorable for network expansion Obtain approval form RFPDC, MOIC to adopt Mixed Spectrum Pricing Formula. Obtain firm Network Roll out plan for next 2 years from operators. Allocate spectrum adequate for current and next two years requirement.
32

Conclusions (contd.)
5. 6.

7.

Revoke excess bandwidth (i.e. bandwidth requirements for over next two years) Charge, as per Mixed pricing formula, for the essential bandwidth and the bandwidth necessary for the next two years requirement Implement the New Spectrum Management Regime by 6 months time

33

Conclusions (contd.)
8.

9.

10.

Provide equal level playing field to all operators by applying the same regime Apply the new Regime equally Make decisions on the issues after Apply the new Pricing and Management regime for the purpose of spectrum usage
34

Recommendations
1 2 3 4 5

Conduct consultation on the new considerations outlined here to implement the spectrum refarming. Make final decisions after taking into consideration the comments from consultation. Obtain permission from MOIC to implement the New Pricing Regime Apply the new Pricing Regime from FY066/65 Spectrum Fee shall be paid in advance for upcoming fiscal year and will be adjusted at the end of the year
For operators already providing service, payment to be based on previous years fees For new operators fees to be charged on reservation based on proposed business plan

35

Annex

1:
500 2x2.4 12 3 2% % Dist 100% 5% 50% 30% 10% 5% 0 0 0 0 0 0 No Of BTS 500 25 250 150 50 25 Erl Per BTS Total Erl. 14 8.79 14.07 19.34 24.60 42.00 63.00 72.00 87.60 126.00 150.60 350 2,198 2,111 967 615 6,240

Subscriber Base Calculation for 2x2.4 Mhz GSM spectrum

Number of BTS Bandwidth (Mhz) Number of Carriers Frequency Reuse Factor (FRF) Blocking (Erlang B formula) BTS Configuration Macro Omni 3 trx 1/1/1 2/1/1 2/2/1 2/2/2 3/3/3 4/4/4 5/5/5 6/6/6 8/8/8 10/10/10 Total Total Capacity for Voice (Erlang) Average Erlang per Station Traffic mE/Sub Loading Factor

6,240 Subscribers supported 12.48 Maximum per BTS 25 Average Per BTS 75% Total in the Network

738 374 187,200

36

Annex -2: Subscriber Base Calculation (contd.)

Frequency Re-Use Factor 3 Number of BTS for Averaging Subscriber Traffic (mE/Sub) Utilization Factor Bandwidth (MhzPaired) Number of Carriers BTS Configuration Macro Omni (3 TRX) 1/1/1 2/1/1 2/2/1 2/2/2 4/3/3 4/4/4 6/6/6 8/8/8 10/10/10 Total Average Erlang per Station Subscribers supported @ Spectified Loading Maximum per BTS Average Per BTS Total in the Network ('000) Access Lines/Mhz Paired 12.48 689 374 187 78 24.21 33.66 43.42 50.26 52.18 57.44 68.62 76.34 85.26 1,000 70% 500 25 75% 2.4 12 Dist % 100% 5% 50% 30% 10% 5% 0% 0 0 0 0 750 25 75% 4.4 22 900 1,000 1,000 1,300 1,300 1,500 1,500 2,000 25 25 25 25 25 25 25 25 75% 70% 70% 70% 70% 70% 70% 70% 6 7.2 8 9 9.6 11 12 15 30 36 40 45 48 55 60 75

Erl/BTS 14 8.79 14.07 19.34 24.60 49.00 63.00 87.60 126.00 150.60

10% 20% 30% 10% 25%

10% 20% 30% 30% 10%

20% 40% 30% 0%

30% 40% 30% 5%

20% 40% 30% 10%

20% 20% 40% 20%

0% 40% 30% 20% 10%

20% 30% 40% 10%

15% 30% 30% 20% 5%

726 545 124

1,010 909 151

1,216 1,216 169

1,407 1,407 176

1,461 1,899 211

1,608 2,091 218

1,921 2,882 262

2,138 3,206 267

2,387 4,775 318

37

Attachment 1: NDCL Comments

GSM 900 - Impossible to revoke temporary 2 x 4.8 MHz BW - Currently 2x12 MHz is being used as per the planning of the available BW - currently 2 million subscribers. Planned to increase the subscribers up to 5.1 million within 2-3 years - If revoked, negative impact on operation of service, QoS will degrade GSM1800 Unpractical to limit the NDCL spectrum to 2x12 MHz spectrum BW. Plan for Expansion of Network 3.5 million project. Already import of equipment with S666 configuration of BTS. If limited to 2x12 MHz BW, problems arises on technical and financial aspects so that the service would be adversely affected. Equipment is already imported to cater the 3.5 million subscriber

38

Attachment 1: NDCL Comments

(contd.)

CDMA800 Abnormal Frequency allocation table. Guard band is not suitable. For e.g. the difference of ch no. 349 of operator 2 and channel 370 of operator is only 21 instead of at least 41. The name of the operators is not mentioned although the operators have already been assigned the spectrum. From this it can't be said that amount of spectrum intended to provide to the NDCL Channel no. of the proposed is not matched the existing usage of the channel.(existing usage of NDCL is 119, 201, 283; Future paln:160, 242) If the channel no is changed the mismatch of the terminal device with that of the CDMA network system results the disruption of the service Being unavailability of the over the air service provisioning (OTASP) in the FWP/FWT, it is necessary to change the channel no. in the network and subscribers' terminal manually. Current no. of subscribers is ~6 lakhs, so it is impossible to change the ch. no. in each terminal of the subscribers. So it is not suitable to change the channel. usage pattern from the existing channel usage pattern
39

Attachment 2: SNPLL Comments

Revoking of 2 MHz frequency will
- lead to the very painful and expensive network redimensioning process, - which will drastically slow down network roll out, - substantially degrade the QoS provided to the customers, and will definitely - undermine foreign investor's confidence in the country

40

Attachment 3: UTL Comments

GSM1800 Minimum Spectrum should be 20 Mhz in stead of 16 Mhz and should be allocated equitably among all the carriers in 5 Mhz each. CDMA800 Guard Band between the operators should be given to avoid interference Other Comments Spectrum for WiMax should be covered, GSM band should be available for unified licenses. Penalty for unauthorized use of spectrum is required. CDMA operators should also be given 3G spectrum in 2.1 Ghz band. Time frame for spectrum allocation by NTA should be defined
41

Attachment 4 SMART Telecom Comments

GSM900 1. GSM might be more appropriate over CDMA technology 2. Due to the varieties in the low cost range of handsets, GSM would be certainly suitable as compared to CDMA
3. Due to good coverage and availability of wide variety of affordable terminals should be given the highest priority

CDMA1800 overlaps with about 10 MHz of GSM1800 band which has imposed a constraint in allocation of GSM 1800 spectrum GSM would be certainly suitable as compared to CDMA

42

Attachment-3 Mr. Vaidyas comments

To ensure long term vision of using spectrum for the maximum benefits to all stake holders, viz, the subscribers, the state and also for the operators, I would like to suggest following line of actions: a) Eliminate the concept of license of spectrums as a property of the stakeholder. If NTA is considering for the effective and efficient use of spectrum for the benefit of the people the spectrums shall be kept open for all and allocate them as required based on their performance. Non performers should be stripped of the spectrum. b) NTA shall adopt the concept of compatibility for effective and efficient use of frequency for specified quality of service. By adopting this concept state could generate the revenues from the precious natural resource. c) Assign a base line Frequency Bandwidth at reasonable fee d) Additional Bandwidth be provided either on exceeding certain subscriber base or annual income base (AIB). AIB fixing will cater for a situation of high telecom traffic of subscribers resulting in a larger demand for spectrum. e) The AIB may be taken as the product of subscriber base and current annual Average Revenue Per Use (ARPU)
43

Attachment-5 Mr. Vaidyas comments (contd..)

f) More spectrum be assigned to the operator when the subscriber or revenue base is exceeded g) Provide adequate time frame to the current licensees to redraw their network. h) After that time frame, if the operators want to retain large chunk without meeting the base lines (subscriber base or AIB), charge them hefty prices, say 'x' times the base price (punitive action against extravaganza) for the spectrum Typical figure may be : a) Base line bandwidth of 2x2.4 Mhz for GSM) or 2x2.5 Mhz (for CDMA) for upto 500,000 subscribers or AIB of upto Rs 4.2 Billions (based on ARPU of Rs 700) per month) b) The applicable price may be e.g. annually Rs 10 millions for the base line bandwidth.

44

Attachment-5 Mr. Vaidyas comments (contd..)

c) In case more bandwidth is required as a result of attaining the required spectrum efficiency as defined in point (a) above, it be provided only in steps of 2x1.2 MHz (2x1.25) and at pricing of annual Rs 4 millions per/duplex 1 Mhz band (Base Line Spectrum Price: BLSP) for additional subscribers of upto 250,000 or additional AIB of upto RS 2.1 billions. (same price and efficiency as in a above) d) Any allocation of spectrum above the limits defined by points (a) and (c) above be charged at 'X.BLSP'. The figure for X may be taken at least 10 resulting in annual charge of Rs 40 millions/duplex one MHZ until those conditions are met. e) In order to adjust to the new pricing regime, provide existing operators a grace period (GP) of say One Year so that they can reconfigure their network surrender the highly priced spectrum if they so desire. During this period charge the excess spectrum on the basis of BLSP. I consider these arrangements will help NTA to attain its goal of efficient and effective utilization of spectrum for the benefits of all. GM Vaidya, Transmission Engineer (retd. Form NDCL, now free lance consultant)
45

Attachment-6 DOT India Subscriber linked spectrum allocation

Government of India DOT O R D E Rs Dated: the 9th January, 2008 In supersession of all existing orders relating to subscriber base criteria for allotment of CDMA and GSM spectrum, the following subscriber based criteria shall be followed No. J-14025/200(17)/2004-NT(CDMA) and, J-14025/200(17)/2004-NT(GSM)
Service Area Minimum subscriber base (In Lakh) required for allotment of CDMA carriers of nominal 1.25 MHz bandwidth each 2.5 MHz (2 carriers) Metro Service Area Telecom Circles Category A A or B Service Area No criteria* No criteria* 3.75 MHz (3rd Carrier) 5 8 5 MHz (4th carrier) 20 50

Minimum subscriber base (In Lakh) required for allotment of different amounts of GSM spectrum 4.4 MHz 6.2 MHz 8 7.2 MHz 30

Telecom Circles Category A or B

No criteria*

46

Attachment-7

TRAI Indias Spectrum Assignment Criteria fixing example

(Taken from Cellular Operators Association, India: COAI paper)

47