New Delhi: At least three blocks of top-up telecom spectrum may be made available for cellular operators across most of India, as the department of telecommunications (DoT) seeks to ensure that no airwave remains unsold in the upcoming auction. Originally, the department in a 27 August note said it will be able to provide three top-up blocks of spectrum only in around half the mobile-operating areas in the country.
Much of the spectrum to be vacated by the telecom companies that lost their licences following a Supreme Court verdict will be reserved for re-farming radio waves in the 900Mhz band. DoT intends to take back the spectrum allocated to telcos in this band and replace it with airwaves in the 1,800Mhz band at the time of renewal of licences.
The main reason for taking back the spectrum is to auction it again in two-three years.
No top-up spectrum will be available in Delhi, Mumbai, Gujarat, Punjab, Uttar Pradesh-East, Rajasthan and Himachal Pradesh, DoT said in its note, which broadly detailed the rules and regulations of the 2G spectrum auction that is expected to start on 12 November. The telecom operating areas or circles of Maharashtra, Haryana, Uttar Pradesh-West and Bihar have only two blocks of 1.25MHz each. The absence of three top-up blocks in about half of the country’s telecom circles could possibly result in spectrum being left unsold as new operators are unlikely to bid for circles where they cannot start services immediately.
However, as part of an exercise to validate the available spectrum, DoT’s wireless planning and coordination (WPC) wing has found that apart from Delhi, Mumbai, Kolkata and Chennai, all other area licences will only come up for renewal after 2015, by when additional spectrum is expected to be available. Older operators such as Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd are likely to see their licences in the metro areas come up for renewal in 2014.
Hence, the WPC wing, which looks after all spectrum-related matters for the Indian government, has proposed making available more slots of top-up spectrum across the country, except in Delhi and Mumbai.
Top-up blocks of spectrum refer to blocks of 1.25Mhz that will only be available to new operators that win at least one block in the auction. This has been done to enable a new operator, which would need at least 5Mhz or four blocks of 1.25Mhz of spectrum in a band, to offer mobile telephony services in the country. The top operators declined to comment as the decision is not official yet.
The move, if implemented, will likely be welcomed by operators such as Uninor and Sistema Shyam Teleservices Ltd that will lose their licences and spectrum once the auction is concluded. Operators such as Etisalat DB Teleservices Ltd have said they will not participate in the auction.
Analysts and operators were dismayed by DoT’s plans to re-farm spectrum as it would lead to a huge jump in expenditure for the operators as well as a loss in quality of service and connectivity for rural and some urban mobile-phone users.
“Spectrum re-farming may draw litigation and could be disruptive from the perspective of consumers and operators,” Rajiv Sharma, telecom analyst with HSBC Securities and Capital Markets (India) Pvt. Ltd, wrote in a 17 September report.
