The battle for spectrum is expected to be intense this time with as many as eight telecom companies, including Reliance Jio, Airtel and Vodafone, submitting applications to take part in the auctions scheduled for February 3.

Wednesday was the last day to submit applications and companies have the option to withdraw them by January 27. Barring Videocon, Loop Mobile and Sistema Shyam, all the other existing telecom companies are in the fray. In comparison, there was only one bidder during the previous auction, in March last year.

There are, however, no new names despite the Government allowing 100 per cent foreign direct investment in the telecom sector.

The renewed enthusiasm among the existing operators is primarily driven by two factors. One, the reserve price has been reduced from earlier rounds and, two, a number of licences are set to expire this year.

No other option Since the Government has decided not to extend the tenure of the 20-year licences, operators such as Airtel, Vodafone and Idea Cellular have no choice but to bid for spectrum, especially in the 900 MHz band.

Therefore, while the Government plans to sell spectrum in the 1800 MHz and the 900 MHz bands, it is the latter that is attracting interest. The 900 MHz band is superior to 1800 MHz because the higher you go on the frequency band, the lower is the wavelength. In other words, signals sent using higher frequency bands travel a shorter distance than signals sent on a lower band.

This characteristic also makes signals transmitted on 900 MHz more potent when it comes to indoor coverage. It has been proven that the 900 MHz band provides 30-40 per cent better coverage than the 1800 MHz band.

This makes the band valuable to a company such as Reliance Jio for 4G services. But the Government is selling only 45 MHz of spectrum in the 900 MHz band, which is enough for three operators.

With other contenders, including Tata Teleservices, Telewings and Reliance Communications also in the fray, the bidding for this frequency could be intense, leading to higher income to the exchequer.

However, there could be legal hurdles for the Government.

Loop Telecom, which currently owns airwaves in the 900 MHz band in Mumbai, has filed a plea in the Telecom Dispute Settlement Appellate Tribunal seeking an automatic extension of its licence at the market rate. Airtel and Vodafone have also filed a similar plea. If this appeal is upheld then the auction will be derailed.

However, M.F. Farooqui, Secretary, Department of Telecom, downplayed any concerns.

“The auction will be successful. The Budget has provided for Rs 11,343 crore from the sale of spectrum in the current year. We will exceed that,” he said.

> thomas.thomas@thehindu.co.in

Related Topics