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Presentation to Department of Telecommunications WPC Wing on Spectrum Valuation Pricing by ISPAI Internet Ser

2. Internet subscribers9.22 million Broadband subscribers2.4 million Operational ISPs90 Annual Turnover of ISP Industry Rs. 1600 Cr. Annual Growth rate25%Target fixed for 201040 million Broadband20 millionNarrowband20 million. About ISP Industry in India . 3.

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Presentation to Department of Telecommunications WPC Wing on Spectrum Valuation Pricing by ISPAI Internet Ser

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    1. Presentation to Department of Telecommunications WPC Wing on Spectrum Valuation & Pricing by ISPAI Internet Service Providers Association of India www.ispai.in

    2. 2 Internet subscribers 9.22 million+ Broadband subscribers 2.4 million + Operational ISPs 90 + Annual Turnover of ISP Industry Rs. 1600 Cr.+ Annual Growth rate 25% Target fixed for 2010 40 million Broadband 20 million Narrowband 20 million About ISP Industry in India

    3. 3 Spectrum Scarce Needs to be assigned to business for use. How should this be done ? When done – it should be fair to the Govt, consumers, business Spectrum

    4. 4 Spectrum Valuation has separate meaning for the Govt and Business : For Govt – as a socialist country, it means to provide a means of communication, healthcare, Governance, education and last of all, revenue. For Business – Ability to provide required service to consumers at affordable rates and profit. Spectrum Valuation & Pricing

    5. 5 Will vary for non consumer requirements, voice communications and BWA. Suggested methods : For Voice communications – we recommend a combination approach of allocation and auction / revenue share. Allocate minimum spectrum to new operators e.g. 6 MHz which allows him to start business. Once the operator has reached a success level and he wants to expand, then he enters auctioning process with his peers. Alternatively the Govt fixes a percentage of market capitalization on a quarterly rolling system of revenue share of spectrum. Advantages : Allows for competitions, Growth and adequate revenue to Govt. Method of Allocation

    6. 6 ISPs can not compete with BSO’s due to unequal financial capabilities. Need to identify serious players. Allocate spot spectrum at reasonable rate to enable reasonable end user price. BTS charges to be for one specified BTS only in a area. For BWA

    7. 7 The ISP’s Legitimate Case For WiMax Spectrum Suitability Of ISPs The ISP’s fixed line network and very business is geared to provide unfettered internet access, high speed data downloads and VoIP. Wireless Broadband is the natural extension of existing fixed line broadband business. As usage moves over to handheld devices, ISPs cannot be denied 2.5, 3.5 Ghz licenses. It is akin to asking them to shut down their business. Barring ISPs from allocation of Wi-Max, just like the existing proscription against PSTN interconnection, in no way benefits users or anyone other than the incumbents/ cellular operators. Giving 2.5 GHz exclusively to Incumbents means effectively killing mobile wirless Broadband.

    8. 8 Regulator’s/ Deciding Authority’s Responsibility The DoT may not realize but their unfortunate decision helps ensure a new much-needed technology doesn’t come in the way of the cellular establishment milking their incumbent networks into near perpetuity. The preponderance of advantage enjoyed by incumbents means a regulator or deciding body like the DoT fails even if it simply remains scrupulously neutral. Be it the EU, North America, Australia, Malaysia or India for that matter in the past, we see definitive change only happen through rulings that give a real edge to newcomers and ISPs. Should however the DoT choose to listen, giving 2.5,3.5 or 3.3GHz to ISPs while reserving 3G for cellular operators may work wonders for users as well as the cellular establishment whose own long term interests are ill-served by their present approach.

    9. 9 Experience Other Countries Earlier this year the Malaysian Regulator MCMC disallowed Malaysia’s cellular establishment from bidding for wireless broadband spectrum. Early August this year the FCC Chairman announced ground rules when granting Google’s petition enough was ceded to ensure a ‘third pipe’ allowing ISPs a fighting chance to offer ubiquitous, true wireless broadband mobility in the face of a recalcitrant cellular lobby. In other words, the Malaysian MCMC and America’s FCC feel they have cause to suspect the cellular establishment’s bona fides in wanting to establish a ubiquitous wireless broadband network that would compete with 3G. There is absolutely no evidence to suggest that Indian cellular operators will do otherwise, especially if a 3G auction is slated for later. They will keep the 2.5Ghz spectrum away from others while themselves focusing on 3G. The cellular operators should indeed focus on 3G which is a natural extension to their existing network while the ISPs are allowed to deploy wireless broadband on 2.5Ghz Wi-Max which is a natural extension of their business.

    10. 10 Follow methodology of allocation and auction/ revenue share on market capitalization Allocate spectrum for BWA on reasonable charges for urban & rural areas appropriately One BTS per designated area to be charged. Balance BTS may not be charged or charged nominal ly for effective use of spectrum. Spectrum for Voice and 3G be separated from BWA and dealt differently. Cellular Operators may not be permitted to obtained and hoard BWA Spectrum. Voice, 3 G – 1.8, 2.1 Ghz BWA – 2.5, 3.3. & 3.5 Ghz WI-Max Type new technologies be incentivised for use by ISPs’ specially in semi-urban / rural areas. Recommendations

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