The Telegraph
Thursday , October 18 , 2012
Since 1st March, 1999
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Spectrum shock for GSM firms

New Delhi, Oct. 17: The Telecom Commission today recommended that existing operators would have to surrender their entire spectrum in the 900MHz band when they renewed their licences in 2014.

The move is a big blow to GSM operators such as Bharti Airtel, Idea Cellular, and Vodafone as they will have to cough up about Rs 1.26 lakh crore to buy back this spectrum.

The recommendations of the commission will be put before the empowered group of ministers (EGoM), headed by finance minister P. Chidambaram, for a final decision. The EGoM is likely to meet tomorrow.

Telecom secretary R. Chandrashekhar said the existing operators would be allowed to bid in the auction of 900MHz band, which is likely to take place in the first half of 2013. If they are successful, they can retain the spectrum. However, if the incumbents fail to win the spectrum, they will be given 18 months to move to the 1800MHz for which an equivalent amount of spectrum will be made available.

“If the same operator succeeds, he will retain it, if a new person succeeds, the existing operator has 18 months to make his alternative plan and the new operator will have 18 months to put his infrastructure in place before he gets the spectrum,” Chandrashekhar said.

Total available spectrum in the 900MHz band is 431.8 MHz. All of it has been allotted to GSM mobile telephony players. In May 2010, Trai had sparked off a storm when it suggested that spectrum in this band should be farmed out for efficient use of spectrum. It had said the 2G telephony players should be allotted spectrum in the 1800MHz band — a proposal that Bharti and Vodafone have bitterly opposed.

According to a study by the Cellular Operators Association of India (COAI), which represents the interests of GSM players, around Rs 25,000-30,000 crore would have to be invested in rebuilding networks for the less efficient 1800MHz band. The operators had also said refarming of spectrum would raise tariffs by 100 per cent.

However, the Association of Unified Telecom Service Providers of India (Auspi) — the lobby group of CDMA players — welcomed the move.

“The decisionů would provide an equal opportunity to all operators to acquire it (900MHz spectrum) through auctions in technically optimum chunks rather than a few operators hoarding it,” Auspi secretary-general Ashok Sud said.