Ahead of the auctions in May, telecom operators, especially Reliance Jio and Vodafone Idea, have opposed the government’s decision to allocate additional 5 MHz spectrum worth over Rs 19,000 crore to Indian Railways in the 700 MHz band. This is because the same will deprive them from bidding for this band, which may affect the 5G coverage. In addition, the government also stands to lose revenue.
With the entire 45 MHz of spectrum worth over Rs 1.7 trillion in the 700 MHz band already allocated, the same has not been put up for sale in the upcoming auctions.
The 700 Mhz band has already been allocated for the use of different government ministries/departments/agencies, which includes 10 MHz for the defence ministry, 10 MHz for Indian Railways, 5 MHz for National Capital Region Transport Corporation (NCRTC), and 10 MHz for BSNL. In 2022, auctions, Jio acquired 10 MHz spectrum worth Rs 40,000 crore.
700 MHz is considered a premium band for 5G services as it has the potential to offer wider coverage and in-building penetration. The same is crucial to cover rural areas. Interestingly, the band was unsold in the auctions in 2021 and 2016, but now post the reduction in reserve price and need for 5G, it was bought by Jio in the last auctions.
“Ad-hoc demands of government entities for spectrum should be explored from the spectrum identified for PPDR (Public Protection and Disaster Relief) or other non-IMT bands,” Jio informed the Telecom Regulatory Authority of India.
Even before Trai could complete the consultation process relating to allocation of additional 700 MHz spectrum to Railways, the Cabinet last month approved allocation of additional 5 MHz for Railways for Kavach technology. Additional 5 MHz spectrum, which was earlier provisionally assigned in the 700 MHz band, was also approved for NCRTC for the train control system for Regional Rapid Transit System (RRTS) corridor.
Vodafone Idea, which is yet to launch 5G services, echoed Jio’s stance and said the spectrum in the band should not be allocated to entities other than telecom operators.
“Any further assignment to any government user will leave no further spectrum for TSPs (telecom service providers) in future. In such a case, it will disentitle some private TSPs from this band entirely,” said Anjali Hans, executive vice president of regulatory affairs at Vodafone Idea.
According to Hans, since spectrum is a finite resource, the government should opt for spectrum sharing in the 700 MHz between Railways and NCRTC through already assigned spectrum. Besides, alternate spectrum bands such as 500 MHz and 600 MHz bands can be considered since the need is more for business-to-business (B2B) solutions and equipment makers should be asked to make equipments supporting these bands.
While Airtel said the 5 MHz spectrum is a very small quantity to be of significance to telcos, it however, urged the authorities that use of the additional 700 MHz spectrum to Railways must be restricted for captive use. “The IR (Indian Railways) should not be allowed to offer any commercial services like Internet/Wi-Fi onboard,” said Rahul Vatts, chief regulatory officer at Bharti Airtel.
One of the other arguments raised by telcos is that the spectrum allocated to Railways is lost for commercial deployment forever. “The exchequer stands to gain not only from the auction proceeds but also from regular licence fee ie 8% of AGR at present. In this background any free assignment to government entities or PSUs will have massively impact the exchequer,” Jio said.
According to Railways, sharing of spectrum with NCRTC is not possible for passenger safety reasons.
The government will also set up a Committee of Secretaries (CoS) to consider re-farming of existing spectrum usages with a view to increase the spectrum availability to meet the future needs of telecommunication services.