India is expected to embark on 3G (third generation) cellular services around mid-2006 and not before that as was planned earlier this year by state-owned firms like BSNL and MTNL, according to officials revising New Telecom Policy (NTP).

They also indicated that for 3G services - which enable high speed video and data connectivity on mobile phones - India might end up following IMT 2000 (2.1 GHz) frequency plan that GSM operators like Airtel and Hutch have been pushing for, instead of the US PCS (1900 MHz) band demanded by CDMA operators (Reliance and Tatas).

In fact, one of the targets set up in NTP (2005-06) draft calls for "availability of at least 20 MHz in IMT 2000 band by the end of 2006 for rolling out of 3G services." It does not mention US PCS band.

This draft (dated October 26, 2005) is likely to undergo several changes before it is finalized and put on the Internet for public debate, before NTP is finalized. Although the draft talks about spectrum management, the details of frequency allocation are being worked out separately.

The draft calls for pricing of the spectrum indicating that it may not be given 'for free', as has been recommended by telecom regulator TRAI. The officials said spectrum might have to be priced because one telecom operator (Tata) has offered to pay for it.

"In line with objectives of this policy, the licensor would ensure that the scarce resource is priced accordingly. Appropriate allocation norms and pricing terms would be developed to ensure fair valuation and equitable allocation," says the draft.

This is the second time that NTP is being revised. The first NTP was made in 1994, which opened up the telecom sector to private sector. In 1999, it was revised to reduce the heavy license fee burden on telecom firms and set the path for growth of cellular telephony.

The draft estimates that India would require telecom equipment worth $40 billion by 2010, for which the country has to position itself as a regional hub. It puts tele density (phones per 100 people) target at 30 by 2010, up from around 10 at present and broadband target of 20 million from under a million now.

( www.tmcnet.com)