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BSNL Wants A FREE WiMax License; Others Push For Price Change; Policy Delay?

Well, doesn’t everybody? But the thing is, BSNL being a public sector company, just might get it. ET reports that the telco has sought an entry or licence fee exemption for WiMax, using the reasoning that it’s largely going to provide these services in rural India. Private telecom operators, on the other hand have to pay a reserve price of Rs. 10 crores for A circles, Rs. 5 crores for B circles and Rs. 2 crores for C circles.

The question is – how accountable is BSNL for its earlier promised rollouts? BSNL isn’t allowed to operate in the metro circles, but isn’t it going to provide WiMax services in B and C circles like the private telcos? Frankly, if BSNL is exempt from paying a fee for B and C circles, so should private telcos. I think TRAIs neutrality is again under the scanner.

Update: COAI, the GSM operators association, wants the spectrum for WiMax to be priced the same as 3G, while Reliance Communications and Intel (NSDQ: INTC) want it to be lowered, reports the Hindu. I think it’s a difference of perspective – if you’re viewing WiMax as a threat to Mobile services, then you would obviously push for a level playing field. If you’re looking at it for just broadband services – then you’d want it cheaper.

The TRAI appears to have shifted its stand, according to the report – while they were initially in favour of differential pricing for 3G and WiMax, they’re now looking to review this policy. I think there’s so much of flip-flop and posturing on policy initiatives, that there’s serious fatigue. We’ve been sitting on 3G, 4G and IPTV policy for too long, which is indicative of the lobbying since the stakes are too high. By the time a decision is taken, the technology would have probably evolved to the next generation.

2 Responses to “BSNL Wants A FREE WiMax License; Others Push For Price Change; Policy Delay?”

  1. The TRAI, whose public consultation paper on the allocation of WiMAX spectrum has recently closed for comments and its recommendations are expected by end of June 2008. However if one views how the government has considered its recommendations on auction of 3G spectrum, it is likely that the DoT will go its own way in deciding the spectrum slots and auction policy.
    The latest view of the governement are to invite all bidders , including foreign operators to bid in the auction of 3G spectrum and the bids are expected to run high. This implies giving a very high valuation to companies such as BSNL and MTNL ( the later being a listed company) unless they are required to pay at par with the average bidding price. The BSNL and MTNL also getting the 3G spectrum on a similar basis.

    There are now two scenarios possible.One is that the BSNL/MTNL are required to pay as per the average bid prices. This could mean a very high cash outflow. In USA the spectrum is valued at $1 per MHz per POP. This gives a vaulation of $1 billion for 10 MHz for a 100 Million population. ( Rs 4300 crores). Even if spectrum in India, the fastest growing mobile market in the world goes at one tenth of this price i.e. 10 cents per MHz per POP, the tag comes to $ 1 billion or Rs 4300 Crores. This is far too high these companies to pay out as cash as they need to pay it for WiMAX as well as 3G and possibly LTE.

    This is so as the expanses on rollout of 3G and WiMAX networks also need to be taken into account.

    The second scenario is that they are given the spectrum free. In this case they get a bonanza of a similar amount and can help greatly in thier listing prices and ability to raise further funds.