The telecom regulator has asked the Telecom Department to give clarity on the total amount of spectrum available for auction. The regulator has told the DoT that the quantum of spectrum will have an impact on pricing.
The TRAI has floated a consultation paper for determining the reserve price for the next round of spectrum auction assuming that the entire airwaves freed up after cancelling 122 licences would be put on sale.
However that may not be the case. The Defence forces, for instance, have told the Telecom Department to ensure that the regulator takes on board its concerns regarding spectrum availability. In a letter to the Department of Telecom, the Defence forces have said that if the entire unsold spectrum goes for auction in the current state, it will infringe into Defence band.
While the Defence forces have told the DoT that only 55 MHz of spectrum may be put up for auction, the TRAI paper has considered much higher quantum in some of the circles.
According to a note prepared for the Empowered Group of Ministers, the Department has said that the entire spectrum being put for sale is not available in contiguous blocks of 5 MHz.
This means that the spectrum given to a winning operator post the auction could be split into 2 or 3 chunks. So an operator could get 2.5 MHz chunk in the lower part of the 1800 MHz band and the balance in the upper part. Such an allocation would make it difficult for operators to offer 4G services.
The problem is that the spectrum being put on sale in the next round of auction has been made available after 122 licences issued to new 2G players in 2008 were cancelled. Though this has freed up more than 400 MHz of spectrum, it is dispersed.
While non-contiguous spectrum works for offering voice services, higher technologies need the airwaves to be bunched up together. This could make the air waves less valuable.