Mobile users, brace for traffic jams on the 3G highway

The road’s getting congested for telecom operators in India.

In the US, mobile phone operators such as AT&T have had to face subscriber ire over the past year or so as the use of video streaming and other applications rises in tune with increasing adoption of the iPhone and other smartphones. With the network congested, instances of calls getting dropped or lost have become common.

That’s pretty much the future operators in India appear headed towards as they start sharing the limited 3G spectrum the government sold them last May for a very high price —- `67,700 crore, or $14.6 billion.

The operators have no choice but to do so and when they do it, they risk exhausting the very limited bandwidth, choking the network.

Compared with 15-20 megahertz (MHz) per operator in the US and Europe, Indian operators have just 5 MHz of spectrum. And, no Indian telecom operator has 3G spectrum in all the 22 telecom circles. In the best case scenario, operators such as Airtel and Reliance Communications own spectrum in 13 circles, but for the rest, like other operators, they are also forced to enter into agreements with peers/ competitors.

There are already reports of services being launched by operators in circles where they do not have spectrum. Idea Cellular has already launched 3G services in Delhi and Kolkata —- two circles where they do not own spectrum —- while Vodafone is marketing 3G services in Andhra Pradesh and Kerala —- where that operator does not have 3G spectrum.

Although operators have been talking about negotiations for entering into such agreements for nearly three quarters now, they are tight-lipped when it comes to sharing details, especially about commitment clauses regarding reserving a specific portion of spectrum. While operators characterise the agreements as “simple” intra-circle roaming agreements, industry insiders say network/ spectrum commitments are a part and parcel of it.
At the time of going to press, Bharti Airtel, Vodafone, and Idea Cellular had not responded to queries sent by DNA on Tuesday.

For the operators to be able to guarantee quality service to their 3G users in circles where they do not own spectrum, they must have certain network capacity commitments and guarantees from the host network.

“It may be OK now to commit a certain spectrum for the use of another operator, but once the number of users increases and their data usage peaks, the current 3G spectrum is going to be awfully short,” said an executive with a firm that supplies 3G network equipment to operators and is helping them set up and manage their 3G networks and its sharing. “Sooner than later, operators will face the same kind of network congestion that they now face on their 2G networks.”

Analysts said current 3G networks in India are not at all prepared for the potential flood of traffic, given the minuscule 5MHz amount of spectrum.

Archit Singhal, analyst at Jaypee Capital, agrees that operators are going to be cruising on a rather congested 3G network sooner than later as subscribers warm up to data services.

“While we do not know if there are spectrum commitments being made as part of the sharing agreements, what is most likely to happen is operators controlling subscriber behaviour using two levers —- price and data limits,” said Singhal. “It is also likely that the operators may qualify spectrum commitments with time limits so that by the time their network is getting fairly populated, they are free of the commitments.”   

Kunal Bajaj, partner and director at telecom advisory Analysis Mason confirms the 3G network congestion fears to be real but takes comfort in the fact that industry has time at least till the end of next year before the fears come true.

“At this point in time, these agreements will help the case of optimal utilisation of networks and thus generate revenue,” said Bajaj. “And by the end of next year, which is when our models point to network capacity being exhausted, there would be more clarity on the spectrum roadmap and other policy issues such as ‘spectrum re-farming’ towards making higher-efficiency, lower-frequency spectrum available for use.”