Both old and new players said they were unhappy with the Empowered Group of Minister’s decision to re-farm spectrum partially, although for different reasons.

While the incumbent players said that allowing them to retain 2.5 MHz spectrum in 900 MHz band created technical complications, the new operators said the entire 900 MHz band should have been re-farmed.

The Association of Unified Telecom Services Providers of India said the EGoM has succumbed to lobbying from incumbent players.

“As recently as one week ago, the EGoM had taken a view that all of the 900 MHz needs to be re-farmed so what has changed now that has prompted them to allow partial retention?” said Ashok Sud, Secretary of AUSPI, representing the interest of Reliance Communications and Tata Teleservices.

“This action by the Government increases the inequity between new and old players by giving old players the rights to spectrum for 20 years. Few months ago, the Telecom Ministry had said all spectrum will be auctioned whereas this is administrative allotment,” he added.

On the other hand, the Cellular Operators’ Association of India said that partial re-farming creates problem for the incumbent players. “We urge the EGoM to set up a high-powered technical committee, including representatives from global companies and experts to study the feasibility of the option to retain 2.5 MHz,” COAI said.

Partial re-farming

Analysts said the partial spectrum re-farming could result in detrimental impact on consumers through higher prices as well as poorer quality of service.

“It will also not provide the financing relief the industry desperately needs to be able to reduce industry debt to EBITDA margin ratios, which, at around 5, are currently too high,” said Mohammad Chowdhury, Leader Telecom. PwC India.

>Thomas.thomas@thehindu.co.in

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