New Delhi, Feb. 10: Telecom operators have questioned the government’s move to sell spectrum in blocks of 1.25 megahertz, arguing that this will result in the inefficient use and hoarding of scarce radiowaves.
Mobile service providers said that globally all technologies needed spectrum in blocks of 1.40 megahertz (MHz), or 3 MHz, or 5 MHz. Operators have questioned the department of telecom (DoT) on its choice of selling radiowaves in tranches of 1.25 MHz and asked if it could give any instance of technology that used spectrum in such block sizes.
DoT officials countered that the policy to sell radiowaves in specific block sizes had been based on telecom regulator Trai’s recommendations.
“Since any bidder is expected to bid for a minimum of 4 blocks of 1.25 MHz each which comes to 5 MHz, it should not pose any problem with the rollout of technology,” officials argued.
However, operators said they would have to buy extra amounts of radiowaves because of the block size to ensure smooth quality of voice and data services.
“This not only means higher cost of operation, it also leads to hoarding of this scarce resource and inefficient use,” said an executive from a top telecom company.
To reach higher efficiency levels, operators will require more base stations and advanced technology, both adding to costs.
While the government is unlikely to change the block specification for the current auction which starts on March 11, the next round of spectrum sale that may take place before 2016 may have a different block size.
The government is holding sale of spectrum in 1800, 900 and 800 MHz bands, under which operators have to bid for radiowaves in blocks of 1.25 MHz. In 2010, the 3G spectrum auction was sold in blocks of 5 MHz. Earlier, mobile operators were given 4.4 MHz of start-up spectrum free with licences to start operations.
In the November 2011 auction, the government sold spectrum in blocks of 1.25 MHz.
As it is operators need higher amount of spectrum to cut costs. Analysts said congestion of spectrum meant costs are higher on other counts such as investment in towers, which increases an operator’s overall expenditure.