In it’s response to the Ministry of Information & Broadcasting on issues pertaining to the licensing of Mobile TV services in India, the Indian telecom regulator TRAI has suggested that there be 20 circles of operation for Mobile TV services in India, as opposed to the 22 circles of operation for mobile and broadband wireless services in India. For Mobile TV, Mumbai and Maharashtra are a part of the same circle, named after the latter, and Uttar Pradesh (East) and Uttar Pradesh (West) are being combined.
No Agreement On Allocation Of Spectrum
Not that it matters at this nascent a stage of discussions (the regulatory ping-pong has only just begun), and it’s perhaps incorrect to portray a lack of agreement as a disagreement, but the decision on who gets first dibs at the UHF Band V (585 MHz-806 MHz) has been deferred for the time being. The I&B ministry wants certain slots to be allocated to Doordarshan, and the usage of spectrum for other services like Broadband Wireless Access and IMT should only be considered after Digital Terrestrial Television is taken care of. The TRAI, in response, says that the priority will have to be “considered appropriately keeping in view the requirement of both the sectors” and the convergence of platforms.
Eligibility & Licensing
— The I&B Ministry wants to consider a limit on the number of permissions per entity applying for a Mobile TV license, on the lines of FM Radio, in order to prevent monopolization. In agreement, The TRAI has recommended that no single entity can hold more than twenty five percent of the total number of permissions given in the country, in the first phase of rollout. Our take: this is impractical, and will limit scale and fund raising. Instead of a single large entity like a broadcaster or a telecom operator servicing pan-India, this will encourage fragmentation.
— Telecom Operators vs Broadcasters: What may become a bone of contention between the TRAI and the I&B ministry, is that the TRAI wants to ensure UASL/CMTS licensees (i.e. Telecom operators) be eligible for the bidding process. In a cryptic, inconclusive statement, the Ministry of I&B wants to “create a level playing field between telecom operators and broadcasters.” Our take: we feel that equal opportunity should be given to both, but a “creating level creating field” hints at favoring one group of entities against another.
— Mergers & Acquisitions: Taking cue from the I&B Ministry which suggested a lock in period for licensees who win Mobile TV licenses, the TRAI has suggested that transfer the license should only be allowed after completing the roll-out obligations. This is particularly interesting given that TRAI’s recommendations on M&A and 2G spectrum are still awaited.
— License Fee Reduced: Given the nascent state of Mobile TV globally (though by the time the policy is finalized and licenses sold it might be very old, like 3G), the TRAI and Ministry of I&B have agreed upon a license fee of 4% of the Gross Revenue or 5% of the reserve One Time Entry Fee, whichever is higher.
Rollout has been structured across three phases:
— Phase 1: within 12 months launch services in all cities with a population of more than one million and the State capitals and union territories within the license area.
— Phase 2: within 24 months, launch services in all cities /towns with population of 100,000 or more
— Phase 3: within 36 months, launch services in district headquarters
Delay to meet the roll out obligations should attract liquidated damages for six months and subsequent defaults should result in cancellation of licenses and withdrawal of spectrum.
We expected this to be a bone of contention, given the TRAI’s mobile operator leanings: the regulator had limited the participation of broadcasters in the Mobile TV space by limiting broadcaster entity cross-holding in Mobile TV licensees to 20 percent. The Ministry of I&B (rightly so, in our opinion) asked the TRAI to reconsider this, since the technology allows a broadcaster to, well, broadcast directly to devices.
“Also while cross holdings are provided between Broadcasters and Mobile TV service providers, no cross holdings are provided between Telecom operators becoming mobile TV service providers through the broadcast route. TRAI to examine this issue again as to whether such a stipulation provides a level playing field between the Broadcasters and Telecom operators.”
In our opinion, the TRAI has not adequately addressed the issue: we don’t quite understand how once a Telecom operator takes a mobile TV license, the cross holding restrictions automatically apply to it.
In case you didn’t know, Wipro is probably keeping a very close watch on the Mobile TV regulations. After all, they bought Nokia’s Mobile TV unit.
Previous work at ContentSutra:
— June 2008, ContentSutra: TRAI Recommends Infrastructure Sharing, Separate Licenses For Terrestrial And Satellite Mobile TV
— December 2007: TRAI Decides, Deliberates And Now Delays Recommendations On Mobile TV
— December 2007: TRAI To Recommend Auction Of Mobile TV Spectrum
— October 2007: When Mobile And TV Combine