DoT set to ask Trai to reconsider 800 Mhz base price
The telecom department is set to ask the sector regulator to reconsider
the reserve price recommended for auctioning spectrum in the 800 Mhz
band for a possible reduction, because the government is unable to
procure a contiguous block of 5 Mhz airwaves for sale.
The
Telecom Regulatory Authority of India (Trai) in February proposed that
the government start auction with a base price of Rs 2,685 crore for a
pan-India block of 1 Mhz spectrum. CDMA operators, who use this band of
airwaves, have been putting pressure on the government to cut the price,
saying that it was too high and may prevent them from bidding.
While
the move by the Department of Telecommunications (DoT) is good news for
CDMA operators, non-availability of contiguous bandwidth means the
usability of the airwaves will be affected. For instance, the
fourth-generation long-term evolution technology requires contiguous, or
continuous, airwaves of a minimum 5 Mhz of airwaves.
The telecom
department will also ask Trai to propose the spectrum usage charge for
the spectrum, according to an internal DoT document.
While the 800
Mhz band is traditionally used by CDMA operators, the new telecom policy
allows liberalised use of spectrum. That makes this band more lucrative
than the 900 Mhz or 1800 Mhz bands used for providing more popular GSM
services, as lower frequencies are more considered efficient, especially
for data services.
Trai had cited the efficiency of the 800 Mhz
band and the availability of contiguous blocks for setting the base
price higher than the price at which 1800 Mhz airwaves were sold at an
auction as recently as in February.
A DoT committee has now found
that it is unable to meet the most basic premise set by the regulator, a
contiguous block of 5 Mhz spectrum.
At best, the government would be
able to shore up a contiguous band in just four of the 22 telecom
service areas: Assam, Madhya Pradesh, the Northeast and Mumbai, the
document says.
Trai had recommended the government to take back
800 Mhz spectrum from Mahanagar Telephone Nigam Ltd and Bharat Sanchar
Nigam Ltd, saying that the two state-run operators have left them
largely unused, and that this would make a contiguous band available for
sale.
MTNL has refused to part with its spectrum holding, saying
that it has already invested heavily over the networks in Delhi and
Mumbai. BSNL says it has used this spectrum to render telephony services
in rural and far-flung areas where other technology including GSM
services are not possible. If it must surrender the bandwidth, MTNL has
said, its investment must be reimbursed by the government with auction
proceeds, on a pro-rata basis. MTNL's CDMA licence would expire in 2017.
The
DoT committee has also explained that even thought Tata Teleservices
has surrendered part of its CDMA spectrum, the matter is in the court
and it wouldn't be legally advisable for the government to auction the
surrendered spectrum until the case was resolved.
The committee
wants the regulator to reconsider its proposal to make it mandatory for
new bidders of 800 Mhz to seek a minimum of 5 Mhz airwaves, because of
the lack of contiguity in 18 service areas.
In the February
auction, telecom companies had together bid Rs 61,162 crore for the
rights to use a total of 399.2 Mhz spectrum across 1800 and 900 Mhz
bands. The winning price for pan-India spectrum in the 1800 Mhz was Rs
2,270 crore.
No comments:
Post a Comment
Enter your valuable comments here