Telecom Commission to decide on spectrum retention by incumbent GSM telecos
By Parvina Purkayastha - Tue Oct 16, 11:24 am
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The Telecom Commission, the highest decision-making body of the communications ministry, will meet to decide the quantum of airwaves that can be retained by incumbent GSM telecommunication in the 900 MHz band, ahead of the government’s plans to take away these airwaves and resell it through an auction process in early 2013.
The Telecom Commission will examine three proposals made by Department of Telecommunication, including allowing telcos to retain up to 5 units of airwaves in the efficient 900 MHz band when these airwaves are refarmed. Incumbent operators have vehemently opposed the proposal to refarm airwaves, which involves redistribution of the highly efficient airwaves in 900 MHz band, that is largely held by companies like Airtel, Vodafone and Idea, and substituting it with frequencies in the 1,800 MHz.
The Department of Telecommunication (DoT) panel examining sector regulator TRAI‘s recommendations on this issue has listed three possible execution strategies – reframe all airwaves held by incumbents in the 900 MHz band, or allow these mobile phone companies to retain either 2.5 MHz or 5 MHz of airwaves in this band.
The telecom department has told the Telecom Commission that refarming all airwaves in the 900 MHz band would be in line with sector regulator TRAI’s recommendations, would provide an equal opportunity for all mobile phone companies to bid for these airwaves and would also help the government get maximum revenues as incumbents and companies that don’t have spectrum in this band would have to compete for the same resources.
At the same time, the department has also pointed out that this could result in the network infrastructure of incumbents becoming redundant, forcing them to make substantial investments in new equipment if they fail to win back spectrum in the 900 MHz band in the auctions.
The DoT is also of the view that this provides an equal opportunity for all mobile phone companies to bid for this band and could optimize price realisation. But the department has also cautioned that this option may not be technically optimal and added that telcos can deploy 4G services in the 900 MHz band only if they had 5 MHz or units of airwaves in this frequency.
Allowing telcos to retain 5 MHz in the 900 MHz band will allow them to use their existing infrastructure, which will help avoid temporary adverse impact on rural and urban coverage, in addition to allowing telcos to roll out 4G or LTE services using this spectrum, the department said. But this leads to a scenario where incumbents have no incentive to bid and could have an adverse impact on price realisation, the department’s note to the TC states.
Bharti, Vodafone and Idea have warned that reallocation of more efficient 900 MHz (megahertz) spectrum through auctions would make investments of over Rs 150,000 crore redundant, lead to protracted disputes, disrupt services for hundreds of millions of mobile customers and translate to higher tariffs for customers as operators would have to incur huge costs for setting up additional towers for the 1,800 MHz network.
India has limited the upcoming spectrum auctions starting on November 12 to between 10 MHz and 13 MHz in every region as both the telecom department and TRAI were of the view that selling all airwaves vacated by the quashed mobile permits would prevent a successful execution of the refarming plan
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