India's Telecoms Regulator Recommends Auction For Broadcast Mobile TV Services

Indian regulator TRAI issues Draft Recommendations for Mobile TV Licensing in India

In a region characterized as the largest mobile TV market in the world, with Korea, Philippines, Japan, Singapore, Malaysia and others having launched mobile TV services, the Indian regulator TRAI has now issued draft recommendations for licensing of mobile TV services. The draft recommendations come after a brief consultation process. India is the fastest growing cellular mobile market in the world with over 8 million users being added every month( nearly a 100 million a year at current pace) but is beset with serious policy issues of licensing, spectrum allocation and regulation. 3G spectrum is not yet allocated in the country and time is running out for many companies which target mobile multimedia services.

The TRAI has recommended a bidding process for licensing of mobile TV services, with a one time entry fee as being the sole criteria for the selection of bidders. Upto 74% foreign direct investment will be permitted in mobile TV companies. Technology neutrality has been permitted in the licenses; i.e. the licensees can roll out networks based on any of the commonly used technologies for mobile TV. Each successful bidder is to be allocated one spectrum slot of 8 MHz irrespective of technology.

The regulator has proposed to allow all mobile companies to start providing mobile TV services without any entry fee or any additional license fees. It has however not elaborated how these will be provided in the absence of allocation of 3G spectrum.

For the terrestrial transmission based mobile TV services, however a very severe regime has been proposed. Only those technologies are to be allowed which have a base of at least 100,000 users. This may be difficult to meet for many technologies, which have undergone trials but the networks are under launch.

The yearly license fees for such companies is to be 6% of gross revenues plus 5% of the highest bid for one time entry fee. As the license fees for entry can be very high, the yearly license fees is set at an unprecedented high scale. However mobile companies providing identical services need to pay no such license fees.

Mobile TV licenses have been offered separately for Terrestrial broadcast and Satellite based services. The roll out times provided are 1 year, otherwise the bidders need to agree to forego a performance guarantee of $5 million. ( For whole of India).

The regulator has chosen to be silent on how a satellite system can be coordinated and made operational within one year.
The present recommendations are in a draft form and the regulator will issue final recommendations after 10th Jan 2008. The government is then expected to come out with policy to regulate and issue licenses in the sector based on these policies.