One of the most interesting things that happened within government in Sri Lanka with regard to electricity policy was that they started asking a different question. Instead of asking only the question”how much does the proposed electricity generating option cost” they started asking the question “what are the costs to the economy of load shedding.” The end result of this shift in thinking is that Sri Lanka in the only South Asian country (other than Bhutan and possibly the Maldives) that can assure its citizens and industries more or less 24/7 power. Power in Sri Lanka is a lot more expensive than in the region, but our companies and people do not have to invest in generators, inverters and various other back up mechanisms. It seems that the government of Pakistan should also start asking a different question with regard to 3G and 4G frequencies: “what are the costs to Pakistan of not having wireless data networks,” not “what is the one-time revenue boost the government will get from an auction.
In 2010, the Obama Administration announced a road map to release 500 MHz of frequencies for mobile broadband. Looks like progress is being made. Perhaps the most significant move by the commission was to allow a broad swath of airwaves to be used for outdoor unlicensed broadband, clearing the way for a new generation of Wi-Fi networks and other uses of freely available airwaves. Unlike the airwaves used for mobile phone traffic, which are licensed to a specific company, unlicensed spectrum can be used by anyone. Previous establishments of unlicensed airwaves led to innovations like garage-door openers, baby monitors, wireless microphones and Wi-Fi networks.
In November 2013, the Myanmar Ministry of Communication and Information Technology called for comments on a set of draft rules that would govern the liberalized telecom sector. LIRNEasia submitted Comments on Draft Rules Dec 2013_1 covering all but one of the topics.
Under Sri Lanka’s law, if an operator goes out of business, the Director General of Telecom has to run it. This used to be one of my nightmares. I knew how to regulate, but did I know how to run a company? The Daily Star paints a grim picture of Citycell, a Bangladesh CDMA licensee. So grim that I should feel sorry about reiterating criticism of the discounting of their payments by the government when the licenses were up for renewal.
When I was interviewed by a journalist from the Internet Journal, said to have one of the highest circulations in Myanmar, I offered him a short piece I had written about Myanmar. It’s now been translated into Bamar (except for the table and my name). The last few paras of the piece: The government intends to establish a regulatory agency within two years. In the interim, the Ministry of Post and Telecom will function as the regulator. There are concerns both about capacity to regulate in terms of technical skills and also in terms of ability to exercise authority over the incumbent allied with a military-backed entity.
Fiji follows Papua New Guinea in assigning 4G frequencies. It appears the auction is going well. Notices posted by the Department of Communications yesterday showed that of the three telecommunications providers, only Vodafone filled their 30 MHz quota and had left the ongoing 4G spectrum auction leaving TFL and Digicel to bid for the remaining frequencies. Each company had a quota of 30 MHz. In total, there were 20 lots of spectrum to bid for with bids ranging from $131,500 to $504,700 by the close of the auctions yesterday.
We’ve been writing about spectrum sharing on and off. There is mention that sharing will be encouraged in the Indian National Telecom Policy 2012. Indications were that actions to implement the policy were underway. But it has come up against the need to raise more money from auctions. I came up against this problem in Bangladesh early this year.
We have reiterated the need for spectrum refarming. But the most difficult part has been extracting inefficiently used spectrum from government agencies. Looks like the US government is focusing on this problem, not only focusing but applying novel thinking to it. Perhaps the most interesting and highly charged recommendation in the president’s directive is one ordering recommendations for incentives that could be used to persuade government departments to share or give up spectrum. A study released last year by a presidential advisory council on science and technology recommended that the government create a “synthetic” currency that could be used to entice federal agencies.
It appears that India’s Department of Telecom is rethinking auctions as the mechanism for assigning spectrum: After failure of two rounds of airwave auction, the Department of Telecom (DoT) is now exploring pricing methods for fixed priced allotment of spectrum, said an internal note. An ‘expanded committee’ will ascertain ‘concept, operational parameters and conditions’ for a market-related process for giving away spectrum, said the note reviewed by ET. My first reaction was that this would be contrary to the sweeping ruling given on the 2G auction by the courts, but it appears there is wiggle room: However, in September last year, the Supreme Court had said in its opinion on queries raised by the government through a Presidential Reference that auction was not the only way to allocate natural resources like spectrum. Further, maximising of revenues were secondary to serving the public good with regard to awarding allocating natural resources. Full report.
For most of its existence the South Asian Telecom Regulators’ Council (SATRC) has been a talk shop, not particularly noted as being on the leading edge of anything. Therefore I was very pleased to see that it is being cited as the pioneer in implementing the APT’s 700 MHz band plan that will provide enough low-frequency spectrum for quick rollout of wireless broadband, an absolute necessity for a region that has very little wires connecting homes (and still not able to justify the costs of FTTH given what people are willing to pay for broadband). The only down note is about Sri Lanka (which prides itself as the first to introduce new technology in the region) keeping out of the South Asian consensus along with Iran. This is perhaps because the government handed out the 700 band frequencies to a large number of private TV broadcasters for nothing (for Treasury) over the past few years and is thus constrained. According to the Ericsson Mobility Report (November 2012), LTE networks are expected to cover 60% of the population in Asia Pacific by 2017, up from an estimated 1.
It has a bit of background. Warid Telecom of Abu Dhabi had acquired the 6th mobile operating license in Bangladesh, through open auction at US$ 50 million in 2005. The license was bundled with 15 MHz. spectrum in 1800 MHz. band.
In my recent visit to Colombia to assess the ICT sector for the OECD, I found that the Office of the Controlaria (Auditor General) was playing an increasingly central role in telecom policy, second-guessing decisions by policy makers and regulators years after the fact, for example requiring a Mayor responsible for the decision by a municipally owned telco to introduce ISDN many years back to compensate the municipality out of his personal funds for the resulting losses. The broader issues of government ownership raised by this story are discussed in detail in my LBO.LK Choices column. The Indian Comptroller and Auditor General was involved in telecom regulation from the 1990s, for example claiming that TRAI under the leadership of Justice Sodhi was negligent in not optimizing government revenues through BSNL. It played a decisive role in the 2G scandal that has been dragging down the Indian telecom industry for the past 2-3 years by making an inflated assessment of the losses caused.
Total Telecom gives details of the licenses that will be issued in Myanmar upon the completion of a three-stage process. Technology neutral is good. How much spectrum per license is not stated. If it is 5 MHz, as the rumor mill says, it is unlikely that the government’s objective of 80 SIMS per 100 people can be achieved. After the 4 April deadline, the Committee said it will reveal the applicants that have qualified for the next phase of the licensing process, stage three, which will decide which two companies will be awarded the licences.
Thomas K Thomas has been covering Indian telecom issues for a long time. His reflections on the lessons that need to be learned from Indian spectrum policy since 1994 are worth a read: Back in 1994, when telecom licences were given out for the first time, a flawed auction design allowed non-serious players to bid astronomical sums and then default on payments. In 2002, operators were given additional spectrum on subscriber-linked criteria without any upfront fee. This was the first time anywhere in the world spectrum was given based on number of subscribers. In 2008, the then telecom minister A.
LTE (aka 4G) is manifolds faster than UMTS (aka 3G). That doesn’t mean the governments can make more money from auctioning LTE spectrum. Her Majesty’s government, which had forked £22.5 billion from UMTS auction 12 years back, knows it. Yet the British Finance Minister, George Osborne, targeted £3.
One more qualified bidder than number of slots is a prescription for a bidding frenzy. But then, something like this has been done before. In the UK they had one more slot than there were existing operators. The consequences of being the only 2G operator who failed to get a 3G license drove up the prices. That should do it in Bangladesh too, unless someone comes up with a clever solution.