New Delhi: The Telecom Commission, India’s highest telecom decision-making body, is expected to shortly make key recommendations on refarming spectrum in the 900MHz band held by GSM operators, but delay deciding on spectrum in the 800MHz band held by CDMA operators.
“Refarming of 800MHz spectrum can be taken up only after the results of interference studies are available,” the department of telecommunications (DoT) says in an internal note prepared for the Telecom Commission, which Mint has reviewed. DoT adds that since licences of operators with spectrum in 800MHz band will only expire in 2017, there is time to look into the issue.
The telecom sector has been debating the refarming issue for years. Older GSM operators such as Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd are opposing the move.
Refarming refers to the government taking back spectrum in the 900MHz band for auction when the telcos’ licences come up for renewal. Many of the older GSM operators whose licences will come up for renewal in 2014 are opposing the move. The government has said it will replace such spectrum with 1,800MHz spectrum, but the telcos will have to pay for it based on the price discovered in the upcoming 2G auction. DoT is also looking to auction spectrum in the 900MHz band early next year.
Analyst are wary of refarming spectrum as the sector’s financial health is still far from ideal. “Whether they (telcos) get it in an auction or they invest in additional infrastructure to dampen the impact, the money they will have to spend is huge,” a Mumbai-based telecom analyst with an investment bank said, requesting anonymity. “They (government) have to find another way as this is bad news for the sector, that will also have to pay a minimum of Rs.27,517 crore for the spectrum they have apart from that which will be refarmed.”