Backing the Telecom Regulatory Authority of India’s recent recommendation that the government should make available more spectrum before it conducts the next round of auctions, Bharti Group chairman Sunil Mittal said on Thursday that the industry needed more spectrum and the government’s job was to make it available.
Speaking on the sidelines of the India Economic Summit organised by the World Economic Forum, Mittal in fact set a harder task for the government than what the regulator had proposed. Trai has said that if the government fails to get more spectrum vacated by the defence forces and BSNL, it should postpone the auctions planned in February, but Mittal said the auction deadline should be maintained and the government should also make more spectrum available.
“We want from the government more spectrum. Every country has the same amount of spectrum and it is not that India has less… It needs to be vacated from other places, that is what other countries have also done….Why should this (auction) be deferred? Industry wants more spectrum and the government should make it available to them,” he said.
However, it doesn’t seem that either Mittal’s or Trai’s wish will be fulfilled by the government. An internal committee of the department of telecommunications, which has vetted Trai’s recommendations, has concluded that getting more spectrum released is a time-consuming one, so the auctions should be held as per deadline for whatever quantum of spectrum the government has in the 900 and 1800 MHz bands. The panel’s proposal will now be examined by the Telecom Commission, the inter-ministerial panel that is the highest policy-making body on telecom issues, and if it concurs with the same, a back reference would be made to Trai to reconsider its stand.
The government has proposed to put for auction about 184 MHz of spectrum in 900 MHz band that is held by companies like Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications through their various licences expiring in 2015-16. Further, there isn’t enough 1800 MHz (only 104 MHz) spectrum as a back-up. If the operators fail to win back their 900 MHz spectrum, they will have no option but to close down their services. If they win it back, it would be at a huge price and they won’t be able to invest further in services and network. If a new player enters in lieu of the incumbents, it would take time to start services, so there would be disruption in services.
The solution suggested by Trai is to first increase availability of spectrum and then conduct the auctions simultaneously for 800, 900, 1800 and 2100 MHz bands. It has suggested that 1.2 MHz of 900 MHz spectrum should be taken back from BSNL in all the circles where licences expire in 2015-16; an E-GSM band should be created; where defence has more than 20 MHz in the 1800 band, it should vacate it; and the entire 60 MHz in the 2100 band should be made available for auction while defence should be given 1900 MHz as compensation. This would require the joint efforts of the finance, telecom and defence ministers.
Recently, the CEOs of the four operators wrote a joint letter to the telecom minister Ravi Shankar Prasad with a copy to Prime Minister Narendra Modi urging that auctions not be hold until adequate spectrum is made available. The four have suggested a viable option in such a scenario that states that those licensees whose permits are expiring in 2015-16 be allowed to continue with their existing spectrum and in the intervening period, they pay the price discovered in the February 2014 auctions. This may be adjusted subsequently if required, for the price discovered in the next round of auctions. Alternatively, if it takes too long to resolve supply constraints, the government could work towards a plan to auction all 900 MHz spectrum allocated to the 1996-2000 licensees together, when BSNL-MTNL licences/spectrum come up for extension.