When the recent recommendations of Trai on spectrum auction came out, there were comments from almost all imaginable quarters. It is not unusual for recommendations of any regulator to attract some laudatory and some adverse comments. This happens when the perception of the same objective is from different viewpoints. Very often, most stakeholders see any recommendation in the light of specific short-term possible gains for them whereas the regulator has to take an overall, often long-term, view of the sector. However, so far as these recommendations are concerned, there seems to have been almost total unanimity amongst the industry in disagreeing with several parts. However, what is perhaps more important is the fact that DoT has raised a large number of issues. While seeking clarifications on details and nitty-gritty are common, what is more noticeable is the fact that several of those are rather fundamental in nature. If these clarifications are taken as an indicator of the government?s mind, one can expect wholesale revision by the government before implementation.

There is no denying the fact that Trai has addressed a vast range of connected issues that are of utmost importance to the telecom sector. The key aspects covered are the need for making more spectrum available to the sector, ?liberalisation of spectrum?, spectrum refarming to release the coveted 900 and 800MHz bands, to recommend the quantum of spectrum that can be held by an operator, method of sale namely through auction, base price determination for various bands, etc.

The attempt to open up more frequency bands to increase spectrum availability is indeed laudable. Further, the recommendation to ?liberalise? spectrum, i.e. make it technology- and service-neutral, is not only highly laudable, it is also in line with the world trend and highly desirable to eliminate delays in bringing in more efficient and versatile technologies to the market. There are, however, certain details that need to be addressed and perhaps Trai should have commented upon them after duly considering and finding solutions. The issue of multiple technologies such as GSM and LTE in the same band with or without different operators has to be clearly examined and recommendations should include conclusions and comments to assure the sector of the feasibility. It is well known that the co-working of CDMA technology system in 1900MHz band and 3G/GSM systems in the 2100/1800MHz bands is an issue that has not been conclusively closed in India. Thus, before recommending use of 1900MHz band for CDMA operators to enable refarming of 800MHz band, this issue should have been addressed to get a solution and a consensus.

Refarming?a highly desirable exercise?is another issue that perhaps should have been mulled over in more detail in respect to cost/penalty in implementation. As it is formulated now, spectrum in the 1800MHz will have just one 5MHz slot coming up for auction. Such an auction will necessarily be highly distorted. This is happening because up to 2x15MHz is proposed to be reserved for refarming 900MHz band. As the recommendations stand today, all slots in 900MHz band do not become available immediately. It is at least two years before licences start coming up for renewal (initially in the four metros only and the rest over the next 8-10 years). Besides, one can not expect the shifting operators to start services in 1800MHz band immediately since a large number of new BTS?s will have to be added to even maintain the same quality of service. Thus, practically some slots in a few licence areas will start becoming available for auction in not less than 5 years from now and till then several slots of precious 1800MHz spectrum will lie fallow while the industry will continue to feel the shortage of spectrum. Does the government take up auction in piecemeal fashion? Not a very efficient way to auction spectrum. In addition, two slots of 7.5MHz are proposed to be reserved in 1900MHz band for facilitating CDMA band (800MHz) to be refarmed. The licence renewal for CDMA operators in 800MHz band will come up only in 2023. Thus, we end up keeping another 3 slots (5MHz each) unused for over 10 years. These are an excessive price to pay for refarming 900 and 800MHz bands.

Meanwhile, what happens to the government?s plan to make broadband services more accessible and affordable? The advantage of liberalisation is lost unless more spectrum is made available. One approach could have been that in the post-liberalisation scenario, the available 3 slots in 2.1GHz band could also be auctioned along with the slots in 1800MHz band. In addition to the above, delaying refarming, particularly of 800MHz band, could have been considered, especially if a scheme for better utilisation of 450MHz band could have been worked out.

A lot has been said and written about the base price fixation aspect. Certain contradictions vis-a-vis multiplying factors between different bands recommended earlier have already been pointed out in the clarifications sought by DoT. In addition, one must remember that the base price fixation exercise is not meant to be an exercise based on propagation characteristics only. It has to take into account ecosystems of various technologies in a given band as also whether the frequency band is a fragmented one (such as the 1800MHz band). For example, as per Trai figures, 2.1GHz band has 2,500 LTE devices available as compared to 50 in 1800MHz band. Even while taking the propagation characteristics, the results communicated for 700MHz band vis-a-vis 900MHz band leave one puzzled as to the large differential in the per MHz base price in these two bands.

Thus, it appears that with Trai?s attempt to tackle a large number of important issues associated with spectrum auction (and rightly so) but constrained by the tight time schedules specified by the Court has forced a somewhat hurried recommendations on spectrum auction. There appears to be a definite need for a review and reconsideration by the regulator.

The author is former member, Trai, former member, Telecom Commission, and former CMD, BSNL