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Sibal hints government likely to auction five more broadband licenses by next year

The government will auction five more wireless broadband spectrum slots increasing the total wireless broadband players from 3 to 8 by the next year, going by what telecom minister Kapil Sibal told an international conference in Geneva today.

Sibal, speaking at the World Summit on the Information Society (WSIS) in Geneva, said the total wireless broadband spectrum in the country will reach a whopping 160 MegaHertz (MHz) — more than what has been allotted to mobile phone services in many states.

“It is expected that total 160 MHz spectrum would now be available for broadband wireless access (BWA) use by the next year. Our approach would be technology neutrality for provision of spectrum for BWA. It is upto service providers to choose the best technology (LTE/WiMAX /WiFi) suited to them taking into consideration many aspects such as availability of equipment, efficient use of spectrum and seamless roaming etc,” Sibal said.

Each player in wireless broadband is allotted 20 MHz, which they can use as a single block or as an ‘up and down’ block of 10 MHz each.

A year ago, the government gave out the three slots in an auction that fetched Rs 38,500 crore. According to Sibal, the amount of spectrum would increase by a 100 MHz by next year, implying an addition of five new players in each circle. At the rate discovered last year, the extra spectrum would fetch another Rs 60,000 crore ($13 billion) for the government.

Last year’s auction had seen Mukesh Ambani, through an unknown company called Infotel Broadband, had become the only player to acquire broadband spectrum in all the states of India. Most of the traditional players, like Bharti Airtel and Vodafone, did not know about Mukesh Ambani’s designs on the market and therefore did not bid aggressively, keeping the prices low.

A new auction, therefore, may raise the prices, but the availability of five extra slots may act as a dampener on the prices too. Currently broadband spectrum is held by Bharti Airtel, Reliance Communications (of Anil Ambani) and Aircel, besides smaller players like Tikona and Augere etc..

Though released at the same time as the 3G spectrum, none of the licensees have started deploying broadband networks as they are waiting for Mukesh Ambani to open his cards. Ambani himself is learnt to be waiting for the TD-LTE technology to be ready, before starting deployment.

State-owned BSNL, meanwhile, has deployed such services using the rival Wimax technology, though some of its states are yet to see such services in the light of allegations of impropriety in the selection of its partners in those states.

Wireless broadband is likely to do to India’s broadband what mobile did to its telecom. When mobile services were introduced in early 1990s, India had only around 4 crore phone lines for a population of around 80 crore. Today, it has around 80 crore phone connections, including 3.5 crore landline connections, for its 120 crore people. It continues to add around 2 crore new connections per month.

On the other hand, in broadband — where the wireless revolution has not taken place — India still has only 1.1 crore connections for 120 crore people — giving it an abysmal broadband penetration rate of just 1%. In many countries, penetration rates are in excess of 70%.

“Indian Government strongly believes that all citizens of India should have access to broadband and the transformative opportunities it offers. Broadband services empower masses. They allow individuals to access new career and educational opportunities, they help businesses reach new markets and improve efficiency and they enhance the Government’s capacity to deliver critical services like health, banking and commerce to all of its citizens,” Sibal told the conference.

“The Indian demographics with a large rural population suggests that the development of a robust broadband ecosystem will be the key to meet Government’s objectives. It is a known fact that wireless is the quickest and most efficient medium to provide broadband services in the access network,” he added.

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