The DoT (Department of Telecom) will release a detailed information memorandum (IM) this week on the upcoming 3G auctions. As reported by economic times, the IM (information memorandum) to be released is likely to contains details regarding the billing schedule, qualifications of bidders, terms and conditions, payment schedules and other technical and commercial specifications that are critical to enable bidders to plan their auction strategy.
The DoT clarified that global telecom operators who do not operate in India are welcome to participate, though they will have to acquire a Unified Access Service Licence (UASL) to be eligible to bid. This implies some uncertainty for potential foreign bidders. At present, a pan-India UASL costs Rs 1,658 crore and comes bundled with 4.4 MHz of 2G spectrum. However, recent proposals to unbundle the licence from spectrum and to change its cost are still pending and could remain unresolved at the time India conducts its 3G auctions. This change is owing to a severe 2G spectrum crunch being faced in India with over 300 applicants waiting in queue for 24 months or more to get new spectrum/licences. DoT officials believe that global operators will be willing to join this queue, but given the fact that there is a shortage, the uncertainties relating to the cost and 2G spectrum availability may prove to be a deterrent. Any proposal to change the terms and conditions of licence has to be referred to the Trai and this usually involves a detailed process, including several consultations and Open House sessions with all stakeholders.
Domestic operators Bharti, Vodafone, Reliance, Tatas and Idea are expected to be the main players in the 3G auction ring. Nordic telecom giant Telenor, which recently secured 67% equity in Unitech Wireless is reported not to opt for a pan-India 3G licence but bid for a select few 3G circles. Aircel, Loop, Swan and Datacom may also place bids in some strategic circles.
The reserve price for pan-India 3G spectrum is pegged at Rs 3,500 crore. It is believed that given the limited number of slots, the government may be able to receive a price in the range of Rs 6,000 crore plus for each of the slots giving an additional revenue of Rs 25,000 crore to the exchequer for the current fiscal. The auction of third generation spectrum or airwaves, is likely to start this November. The EGoM has recently approved placing four slots of 5 MHz each in the 2.1 GHz band for auctions in 3G. If the auction is held in December as scheduled, it is highly likely that India will see four new 3G operators before the end of 2010.
To me this seems to be last round of competition between telcos in India. What I foresee is that after aggressive bidding for 3G licences, some of the operators will make huge losses. Then the consolidation phase will follow. By 2012 some of the players will start handling the batten - not to new players but to the one running in adjacent lanes.
Showing posts with label DoT. Show all posts
Showing posts with label DoT. Show all posts
Unique Identification Number (UID) - Does the idea of roping in Telecom service provider has merit?
The Unique Identification Authority of India (UIDAI)has been established to provide a unique number to every resident in the country to target social security services as well as to assure the internal security. Authenticating 1.16 billion people is not an easy task. At this scale, it's going to be a one of its kind project and given the "as is" stage in which India is currently in, Mr. Nilekani needs to do lot of head scratching.
Nilekani, has already said that UIDAI would be looking for the databases of PAN card, passport, driving license, ration card, voter I-card and so on. But the first three cover only a small part of the population and the ration card data is subsumed in voter card data. The telecom user database of 500 million users is an obvious source which can be digged to help the UIDAI to have some part of the personal information checked.
Hence, The Indian government’s ambitious and high-tech unique identity or UID project is all set to ride on India’s 500 million strong telecom network as one of the largest available databases of subscribers anywhere in the world. So as a logical conclusion, DoT, along with the various telecom service providers, can be major stakeholder in this process. There are 480 million telephone subscribers in the country at the moment. Taking margin of error into account, the telecom database is an authenticated database of people in terms of identity and address is concerned.
To discuss how the database of nearly 500 million telephone subscribers can be used for issuing the unique identification number, the enrollment process of UID and how the telecom companies could help in the task of "Standardisation of Know Your Resident' norms which is a major goal of the all-India project for issuing the unique ID, UID Authority of India chaiperson and former Infosys cochairman Nandan Nilekani met telecom operators and DoT officials on 24th Sept seeking their cooperation.
While media reports indicate that Nilekani have sought similar cooperation from banks, post offices, and energy and fertilizer sectors, none of these offer the kind of large subscriber numbers and ready-to-use verification details as the telecom sector. This means that the country’s telecom subscribers could be among the first to be enlisted into UID scheme.
It is learnt that the project is expected to take 12 to 18 months to issue its first UID card and will then accelerate to clock half a billion citizens by the end of 2012. The telecom subscriber base works out perfectly since estimates place mobile users at well past 700 million by this timeframe. So essentially, if the UIDAI could convert every known mobile subscriber into a unique identity, it would have achieved a feat unmatched globally.
A major hurdle in implementing the project arises from the daunting task of developing appropriate software to support such a large database. The UID solution will have to have a quick query response system so that one can search by biometrics, particularly to track criminals. Further, the task of physically collecting one billion biometrics, photographs and other details in a short period of time is a logistics nightmare. Outlets will have to be nominated where people can go to have their data uploaded on to the database. Here again, the 10 million-strong mobile sales and distribution machinery may hold the key. This is because India has 97% mobile subscribers in pre-paid category who return month-after-month to renew the charge on their SIM cards.
As reported in press, Mr. Nilekani has said that the project will provide a unique identification (UID) number not a card. And hence the authentication can be made by using mobile phones. Once the UID is issued, one can go for online authentication.
Now all these seems to be just initial thoughts, getting the loose ends tied up will take its own time. In my opinion, the operators themselves rely on address proof and photo id proof which are unreliable for as far as linking to unique ID is concern. Further many forms (CAF) are missing and operators are being penalized for this. In my opinion, given the fact that many people carry more than two mobiles and also that many of reported numbers may not be operative, it will difficult to get meaningful information from mobile customer data beyond 100 million customer. To take the idea far, Mr. Nilekani's team will require to do some out of box thinking.
Nilekani, has already said that UIDAI would be looking for the databases of PAN card, passport, driving license, ration card, voter I-card and so on. But the first three cover only a small part of the population and the ration card data is subsumed in voter card data. The telecom user database of 500 million users is an obvious source which can be digged to help the UIDAI to have some part of the personal information checked.
Hence, The Indian government’s ambitious and high-tech unique identity or UID project is all set to ride on India’s 500 million strong telecom network as one of the largest available databases of subscribers anywhere in the world. So as a logical conclusion, DoT, along with the various telecom service providers, can be major stakeholder in this process. There are 480 million telephone subscribers in the country at the moment. Taking margin of error into account, the telecom database is an authenticated database of people in terms of identity and address is concerned.
To discuss how the database of nearly 500 million telephone subscribers can be used for issuing the unique identification number, the enrollment process of UID and how the telecom companies could help in the task of "Standardisation of Know Your Resident' norms which is a major goal of the all-India project for issuing the unique ID, UID Authority of India chaiperson and former Infosys cochairman Nandan Nilekani met telecom operators and DoT officials on 24th Sept seeking their cooperation.
While media reports indicate that Nilekani have sought similar cooperation from banks, post offices, and energy and fertilizer sectors, none of these offer the kind of large subscriber numbers and ready-to-use verification details as the telecom sector. This means that the country’s telecom subscribers could be among the first to be enlisted into UID scheme.
It is learnt that the project is expected to take 12 to 18 months to issue its first UID card and will then accelerate to clock half a billion citizens by the end of 2012. The telecom subscriber base works out perfectly since estimates place mobile users at well past 700 million by this timeframe. So essentially, if the UIDAI could convert every known mobile subscriber into a unique identity, it would have achieved a feat unmatched globally.
A major hurdle in implementing the project arises from the daunting task of developing appropriate software to support such a large database. The UID solution will have to have a quick query response system so that one can search by biometrics, particularly to track criminals. Further, the task of physically collecting one billion biometrics, photographs and other details in a short period of time is a logistics nightmare. Outlets will have to be nominated where people can go to have their data uploaded on to the database. Here again, the 10 million-strong mobile sales and distribution machinery may hold the key. This is because India has 97% mobile subscribers in pre-paid category who return month-after-month to renew the charge on their SIM cards.
As reported in press, Mr. Nilekani has said that the project will provide a unique identification (UID) number not a card. And hence the authentication can be made by using mobile phones. Once the UID is issued, one can go for online authentication.
Now all these seems to be just initial thoughts, getting the loose ends tied up will take its own time. In my opinion, the operators themselves rely on address proof and photo id proof which are unreliable for as far as linking to unique ID is concern. Further many forms (CAF) are missing and operators are being penalized for this. In my opinion, given the fact that many people carry more than two mobiles and also that many of reported numbers may not be operative, it will difficult to get meaningful information from mobile customer data beyond 100 million customer. To take the idea far, Mr. Nilekani's team will require to do some out of box thinking.
Rollout penalty for Indian Telcos - Delayed but not denied
The government of India has proposed a penalty of Rs 135.60 crore on private telecom operators, including Tatas, Airtel and Reliance Communication, for delays in rolling out networks. Though, the department of telecom (DoT) has lowered the total quantum of penalty from Rs 477 crore decided earlier to Rs 135.60 crore after repeated representations by the operators, giving a major benefit to all big private telecom players. Almost all private players except Vodafone-Essar face penalties.
As reported in Economic times, the penalty comes to over Rs 41 crore on Tatas, Rs 31 crore on Airtel and Rs 19.65 crore on RCOM. Among others, Aircel faces a penalty of Rs 28.85 crore, HFCL has a liquidated damages of Rs 7 crore and the two PSUs — BSNL and MTNL, along with Vodafone-Essar face no penalty.
The cases for imposition of liquidated damages were processed since 2005 and show-cause notices for imposition of liquidated damages (amounting to Rs 477.15 crore) were issued in 96 cases to 10 operators. There were representations from industry pointing out delays in statutory clearances, grant of spectrum for access, among other factors, for delayed rollouts. Thus, it was decided to revisit the subject and DoT has arrived at revised lower penalty for these operators.
As suggested in one of my earlier posts its also time to adopt Swedish model for penalizing operators for not meeting roll out obligations and are in turn hoarding spectrum. (For reading the full post click here)
As reported in Economic times, the penalty comes to over Rs 41 crore on Tatas, Rs 31 crore on Airtel and Rs 19.65 crore on RCOM. Among others, Aircel faces a penalty of Rs 28.85 crore, HFCL has a liquidated damages of Rs 7 crore and the two PSUs — BSNL and MTNL, along with Vodafone-Essar face no penalty.
The cases for imposition of liquidated damages were processed since 2005 and show-cause notices for imposition of liquidated damages (amounting to Rs 477.15 crore) were issued in 96 cases to 10 operators. There were representations from industry pointing out delays in statutory clearances, grant of spectrum for access, among other factors, for delayed rollouts. Thus, it was decided to revisit the subject and DoT has arrived at revised lower penalty for these operators.
As suggested in one of my earlier posts its also time to adopt Swedish model for penalizing operators for not meeting roll out obligations and are in turn hoarding spectrum. (For reading the full post click here)
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