4G plan in below 2G speed!

If things go as per the plan, the government soon will start its work to assign high-value airwaves of 700 MHz and 2600 MHz to nine companies for service operation. Based on a provision incorporated in recently amended Radio Frequency (Pricing and Distribution) Policy 2016, telecom regulator—Nepal Telecommunications Authority (NTA)—is planning auction of the airwaves which will allow operation of modern technology service fourth generation (4G), also known as long-term evolution (LTE).

Delay of 4G spectrum allocation has been causing huge revenue loss to the government and consumers too are unable to reap benefits from new trend services.

NTA has started making needful preparations to auction new frequency bands and the decision will be made on it very soon, one of the leading newspapers of the country quoted Spokesperson of NTA, Min Prasad Aryal as saying. As a part of preparations, two separate committees have been formed to look into technical and spectrum pricing issues.

Going by the spectrum policy, the government requires fixing base price within three months to auction spectrum. Since this is the first time that the government is assigning spectrum through auction, this will certainly raise revenue collection of the government, however, it is for sure that there will be no big money like that in India where the government raised over Rs 1050 billion from recent spectrum auction in bands including 1800 MHz and 2300 MHz. Nepal is a small market to expect such revenue. However, delay in the auction the spectrum could result in a further loss in spectrum fee, at the time when the government has already lost huge income from spectrum allocation.

As per the NTA’s plan, three companies will be assigned 15 MHz each in 700 MHz band, while in the 2600 MHz band a total of six companies will receive spectrum to operate service under two technologies—FDD and TDD. According to NTA, two companies will be receiving 25 MHz each and a company will be granted 20 MHz for FDD technology. Likewise, three companies will receive 15 MHz each for TDD technology.

In 2014, a committee had recommended the government to keep the base price of 4G spectrum to maximum Rs 12 million per MHz for auctioning. Two big companies—Ncell and Nepal Telecom — for the last five years have been asking NTA to allocate spectrum for 4G. If Rs 12 million is assumed as highest price, the government has lost nearly Rs 2 billion revenue from Ncell and NT due to delay in spectrum assigning.

While fixing base price for spectrum, the government should be mindful and learn from a recent case of India where no operator came for spectrum in the 700 MHz band as the reserve prices were set too high. Following this incident, GSMA had also urged India to reconsider pricing in 700 MHz band. “….As we had cautioned, the spectrum went unsold because the reserve prices for this highly sought-after band were set at an unrealistically high level…,” reads a statement of GSMA. “High reserve prices inhibit investment or delay deployment in next-generation networks at a time when demand for mobile data is exploding. Regulators should consider the conditions of the local market when setting reserve prices for spectrum auctions.”

As the 700MHz band is a digital dividend, the government should free spectrum in this band by switching from analog TV broadcasting to digital, for mobile and broadband internet services.
Recently, NTA has given go ahead to NT to roll out 4G in 1800MHz adopting technology neutrality. Early auction of spectrum will enable other companies to come up with 4G service and end possible monopoly in 4G to be operated by NT. Meanwhile, the government and stakeholders should immediately start work toward content supply side as demand for local content will increase as soon as 4G speed start to hit gadgets. Local contents, localized contents, and proper applications, among other, are must for getting benefited from 4G connectivity.