Spectrum and backhaul transport technologies
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1. Spectrum: Informative video, find a youtube version. Q & A from 24.15.

2. Optical fibre network & microwaves
See: ETTelecom Webinar: Access and backhaul transport technologies
https://www.youtube.com/watch?v=YkrKEGSQOMU

Mobile communication is the main vector for voice and data transmission in India. Other modes like landlines, satellite, cable and private networks do not exist to any extent.

Spectrum availability
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Spectrum was tied up with PSUs due to legacy issues. Govt has brought back spectrum for auction by re-engineering PSU equipment. This has taken time and persuasion, and as a result, no significant new spectrum was introduced until the current auction. Spectrum availability in India is less than half the world norms. More spectrum is now required to meet the twin demands of higher data transfer and higher speed. Heterogeneous technology enables devices to use multiple bands simultaneously; so spectrum bands can be used interchangeably to support 3G, 4G, 5G and CDMA. Spectrum with an operator is a combo of "efficiency" and availability of bands.

The current auction offers more than double the spectrum. Problem is how to fund the cost. Industry feels the revenue per user will not increase significantly so they all want the most efficient 700 MHz band. Govt has priced this band at its efficiency rating vs 1800 MHz band, making it four times the cost of earlier auction price of 1800 MHz. Operators say they will keep away from 700 MHz, except for smaller circles that had low bids on 1800 MHz; they will cover the gap by adding higher frequencies.

Targets and costs
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Govt is aiming for 1 billion broadband users through mobiles, at a higher base speed of 2 Mbps. It desires universal coverage of villages with a high-speed fibre-optic network, radio and/or satellite. Digital India has other initiatives including the E-services and Digital transactions, Smart cities, Govt private network and Make in India. Costs though only estimates comprise Spectrum costs at Rs 410k crore for 700 MHz; towers at Rs 60k crore, microwave investment at Rs 110k crore, BharatNet including Govt network at Rs 70k crore, etc.

Financing Capex
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If Industry cannot increase revenue much beyond the current Rs 250k crore, how will it fund CapEx? Total committed debt of telcos is Rs 380k crore. Of total current debt of Rs 270k crore, COAI firms have Rs 178.5 crore at decent debt/ Ebitda of 3.9 (comparable to the world: 3.0); while others with Rs 92.2K crore debt are struggling.

Govt has made a few decisions:
1. Split license fee component into annualized payments and a lump sum.
2. Spectrum usage charge, a remnant of "pay as you go" scheme has been rationalized and reduced.
3. Universal Service Obligation will fund BharatNet and remote Wifi.

Complaints from Industry
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Industry doesn't like lump sum payment of license fee because it leaves them less scope for Capex. They were pleased with pay as you go, which was introduced when major international companies overbid for licenses and then left without a proper roll-out. Govt of day decided to grant permissions to expedite matters. Industry is complaining about Universal service charge because they are required to provide full coverage in their circles. Industry feels Govt should rethink base price for 700 MHz. It says Govt will get more revenue in future if 700 MHz is adopted now.

Govt doesn't want to forgo Universal Service Obligation levy for obvious reasons. It can not tilt the auction to favour existing operators as this will be challenged in Supreme Court. Govt wants revenues in current year at it has more pressing needs like fiscal deficit and recapitalizing banks. It may or may not improve the situation in the next fiscal - ie. rolling out 700 MHz spectrum in the way industry wants!!

Spectrum Auction 2016: How industry is gearing to match government expectations amidst financial