The Empowered Group of Ministers has finally decided to go ahead with shifting incumbent GSM operators from the 900 Mhz spectrum band, but only partially.
While the earlier proposal was to take away the entire chunk of spectrum held by the incumbent operators in this superior spectrum band, the Minister’s panel on Thursday decided to allow the operators to retain 2.5 Mhz spectrum in this band.
The operators will have to pay a market determined price for what they retain and the balance will be put up for auction. The incumbent players will, instead, be given bandwidth in the 1800 Mhz band.
Partial re-farming will leave the Government with enough spectrum in the 900 Mhz band to accommodate one new player when it is auctioned next year. This band can be used to offer fourth generation broadband services and can be useful for a player such as Reliance Infotel.
While incumbent operators Airtel, Vodafone India and Idea Cellular will get some relief in terms of cost, the operators said that partial shifting creates more technical complications.
“It will be next to impossible to service 450-500 million subscribers in the existing 900 MHz band with the same quality of service with limited 2.5 Mhz in 900 MHz band and remaining on 1800 MHz band without any disruption of wide-scale services,” said Rajan Mathews, Director General, Cellular Operators Association of India.
The COAI, representing the interest of the 3 incumbent GSM players, said that an operator with 2.5 MHz in 900 MHz band and remaining spectrum in 1800 MHz band is worse off than an operator with complete network in 1800 MHz band.
TRAI’s views
The EGoM changed its earlier stand after the Telecom Regulatory Authority of India said it was in favour of allowing incumbent operators to retain a small amount of spectrum in the 900 Mhz band to ensure continuity of services. TRAI had rejected the other option of re-farming the entire 900 Mhz on grounds that it will lead to coverage issue. The regulator also expressed concern that there won’t be enough spectrum left in the 1800 Mhz for the upcoming auction in November if the incumbent operators have to be given alternate spectrum for the entire 900 Mhz band.
The DoT had proposed to shift incumbent GSM players because the 900 Mhz band is considered to be 30-40 per cent more efficient than 1800 Mhz and DoT wants new operators to also get an equal opportunity. At present the 900 Mhz band is being used by Airtel, Vodafone, Idea Cellular and BSNL/MTNL.
But the new players are unhappy with the decision to do only a partial re-farming given that the EGoM had last week taken a view to get the entire 900 Mhz vacated. “We don’t know what has changed in the last one week. This goes against the announced policy of allocating all future spectrum through auction,” said Mr Ashok Sud, Secretary of the association of Unified Telecom Service Providers of India, representing the interest of Reliance Communications and Tata Teleservices. Both these operators do not have spectrum in the 900 Mhz band.