Telecom minister Kapil Sibal has asked the two warring factions of the telecom industry, the dual technology holders and the incumbent GSM operators, to sort out their differences over contentious issues of spectrum refarming as well as prospective pricing and submit their proposals to the government for examination. The move comes as a last ditch attempt on part of the minister to resolve differences between the two sides which through hectic lobbying have made it virtually impossible for the telecom ministry to draw any government policy on the crucial matters.
?The minister has met with representatives from both sides and communicated that he wants a level-playing field for all players ? new, old, dual technology holders or incumbents ? and that if the industry doesn?t stop fighting and instead cooperate with the government then he will have no choice but to go solo?, a source close to the development told FE.
Both factions have threatened to move court if either is wronged. Dual technology holders like Reliance Communications and Tata Teleservices are opposing the telecom department?s move to charge an auction discovered price for the balance period of their telecom licences saying it will solely benefit incumbent GSM operators whose balance licence period is only a few years. Dual tech operators have another 10 years before their CDMA licences expire and close to 16 years left for GSM.
However, incumbent GSM operators like Bharti Airtel, Vodafone and Idea cellular have aggressively campaigned against the Trai proposal which they claim will rob them off spectrum in the valuable 900 MHz range on the pretext of spectrum refarming. They too claim that the recommendations of the regulator, including refarming are will benefit the other side.
?Since dual technology holders are concerned that they would have to cough up more since they hold spectrum across CDMA and the GSM bands, the government gave them the option of surrendering their CDMA spectrum and migrating their subscribers to the GSM technology,? sources privy to the negotiations told FE, adding that the operators refused citing global instances of how in such a scenario the operators tend to lose as much as 60% of their subscriber base.
A study by Analysys Mason says that GSM incumbents moving to 1800 Mhz would cost an incremental capex of R54,739 crore, incremental annual operating expenditure of R11,762 crore and an additional capex of about R26,653 crore to deploy new towers to support the incremental base stations, it added.