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Telcos may be asked to return excess spectrum

Telcos may be asked to return excess spectrum
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First Published: Wed, Feb 27 2008. 12 22 AM IST

Updated: Wed, Feb 27 2008. 12 22 AM IST
New Delhi: The wireless planning and coordination wing of India’s department of telecommunications, or DoT, is currently examining whether mobile phone firms such as BPL Mobile Communications Ltd should be asked to return to the government excess radio spectrum or radio waves that they have rights on.
The ongoing evaluation is based on the revised subscriber criteria that the government issued in January and which regulates the allocation of spectrum. Spectrum is required for communication between wireless devices such as mobile phones.
“Having issued a new criteria, we believe there could be scope for return of any excess spectrum,” said an official at WPC, as the wireless planning and coordination wing is also known, who did not wish to be identified since he is not authorized to speak to the media. “We are looking at spectrum being held by wireless operators in each circle, and if they are serving lesser number of subscribers with excess spectrum.”
Before January, radio spectrum was issued in units of 1.8, 2, 2.4 and 2.6MHz, going up to 15MHz with an initial allocation of 4.4MHz. Phone firms could receive the spectrum up to 6.2MHz if they crossed 500,000 customers.
Now, as per revised DoT rules, operators have to serve at least 1.5 million subscribers to be eligible for an additional 1.8MHz—on top of the initial 4.4MHz allotted—in New Delhi and Mumbai.
The allocation norms are easier in the other metros (Chennai and Kolkata) where firms can seek up to 10.2MHz of spectrum after they have around 320,000 subscribers.
Mint calculations, which were verified by experts and based on the new DoT norms, show that some firms in metropolitan cities such as New Delhi, Mumbai, Kolkata and Chennai, could be asked to return as much as 3.8MHz of spectrum. For instance, Mumbai-based BPL Mobile, which had around 1.2 million mobile subscribers in Mumbai with around 10MHz of radio spectrum, may be asked to return 3.8MHz of excess airwaves, since DoT’s January order mandates operators to serve 1.5 million users to qualify for spectrum beyond 6.2MHz.
Other firms such as Bharti Airtel Ltd and Vodafone Essar Ltd could be asked to return 0.8-1.8MHz.
The department plans to allow up to six months for phone firms such as BPL Mobile to either enhance their subscriber base, or surrender the excess spectrum. “It may not be feasible to ask for spectrum surrender without any notice. Also barring one or two instances, most of the operators do not have more than 1.8MHz of excess spectrum, which is not really too much,” another senior official at DoT added, requesting anonymity.
While BPL Mobile’s chief executive S. Subramaniam declined to specifically comment on surrendering excess spectrum, he said his firm was allocated 10MHz spectrum based on the policy at that time.
“One should also understand that the entire network is planned based on allocated spectrum. If you take a chunk of spectrum out, everything becomes a mess,” he added.
Apart from private sector telcos, even the state-run Mahanagar Telephone Nigam Ltd, or MTNL, and Bharat Sanchar Nigam Ltd, or BSNL, hold around 1.8MHz of excess radio spectrum in some of the metros. While MTNL serves only around 1.1 million subscribers in New Delhi with 8MHz of spectrum, BSNL serves less than a million phone users each in Kolkata with 6.2MHz of spectrum and Chennai with 8MHz.
India’s second biggest mobile phone firm Reliance Communications Ltd, or RCom, which serves subscribers through networks that run on the GSM technology platform in eight states (the firm serves around 36 million subscribers through networks that run on the rival CDMA technology and has just been allowed to launch GSM services across the country, too) also holds 1.8MHz of excess spectrum in Orissa. The company’s GSM subsidiary Reliance Telecom Ltd has around 734,000 subscribers in Orissa with 8MHz of spectrum, which according to the new norms, mandates serving some 3.1 million users.
Telecom experts such as Varadharajan Sridhar who teaches information management at the Management Development Institute, Gurgaon, said the excess spectrum helps phone firms keep the cost per subscriber low, thereby resulting in lower tariff.
“It would be unwise on DoT’s part to take away the spectrum; the government may instead increase the spectrum usage charges,” said Sridhar. “If the spectrum is taken away, even the tariff can go up, since operators will have higher costs to manage.”
The WPC official admitted that taking back the spectrum was not a preferred option, “but if they (telcos) are not serving the required number of subscribers with the allocated spectrum, we will have to do something”.
Surrendering excess spectrum may also pose some technical challenges for operators. “Their transceivers have been tuned to a certain frequency—if any block of spectrum is removed the whole network will have to be readjusted,” said Sridhar.
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First Published: Wed, Feb 27 2008. 12 22 AM IST
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