New Delhi, Nov. 1: Mobile operators can retain 2.5 megahertz (MHz) of spectrum in the efficient 900 MHz band by paying a market-determined price at the time of licence renewals.
Bharti Airtel, Idea Cellular, Vodafone India and BSNL each hold around 5 MHz of radiowaves in the 900 MHz band in various circles. If they agree to retain half of this, the remaining 2.5 MHz will be substituted by frequencies from the 1800 MHz band, the empowered group of ministers on telecom decided today.
Telecom permits of most of these companies will come up for renewal in 2014.
The telecom department plans to auction radiowaves in the 900 MHz band, ahead of it being returned by operators, in the first quarter of 2013. The 900 MHz band is almost 30-40 per cent more efficient than the 1800 MHz spectrum.
The market price for 2.5 MHz spectrum that can be held by operators would be finalised at a later date, probably after the auction of spectrum in the 1800 MHz band and closer to the sale of 900 MHz radiowaves, said telecom ministry sources.
Mobile firms can surrender the entire 5 MHz of spectrum, if they so desire, though few if any would be willing to do so, officials said.
The GSM industry has been opposing refarming or substitution of their more efficient 900 MHz airwaves with 1800 MHz band spectrum as it would cost the sector more than Rs 1,00,000 crore to buy replacement airwaves in an auction and to also build more mobile towers and replace some of the existing gears to continue services.
The current move is likely to allow operators to maintain some connectivity and avoid the total disruption of services, which would have been the case if all of the 900 MHz spectrum held by the operators was to be surrendered.
However, industry groups are unhappy with the EGoM’s decision. “It will be next to impossible to provide 450-500 million subscribers in the existing 900 MHz band with the same quality of service with only 2.5 MHz in the 900 MHz band and the remaining on 1800 MHz band without any disruption of wide-scale services,” said Rajan S. Mathews, director-general of COAI, the GSM lobby group.
Operators have urged the EGoM to set up a high powered technical committee to study the feasibility of the option to retain 2.5 MHz.
“A detailed analysis of all issues involved in refarming, including the full impact of refarming of spectrum in the 900 MHz band on the NTP-2012 (New Telecom Policy), industry and customers in terms of cost, tariffs and business viability, should be carried out,” said Mathews.
Analysts said the move to allow operators to retain some of the spectrum could also impact the already muted response to the 2G spectrum auction as operators may not bid aggressively for more radiowaves in the 1,800 MHz band. It could have serious implications on the government’s target of getting Rs 40,000 crore this financial year from the auction and a one-time fee.
In 2010, Trai had recommended refarming the 900 MHz band, saying it was used for 3G services globally and should not be used to provide 2G services.