Ahead of the crucial Telecom Commission meeting on May 1 where a decision is expected whether to auction or de-licence spectrum in the E and V bands, which are used as backhaul to connect mobile where fibre is not available, most experts FE spoke to said that de-licensing is the way forward and holding an auction does not make sense.
Ahead of the crucial Telecom Commission meeting on May 1 where a decision is expected whether to auction or de-licence spectrum in the E and V bands, which are used as backhaul to connect mobile where fibre is not available, most experts FE spoke to said that de-licensing is the way forward and holding an auction does not make sense. Sources in the department of telecommunications (DoT) also said that an auction is ruled out and even administrative assignment, which means first come, first served, is ruled out. What’s likely on the cards is de-licensing, which also means light licensing. In fact, the Telecom Regulatory Authority of India (Trai), which submitted its recommendations to DoT way back in August 2014, has also favoured a light licensing approach and not auctioning this spectrum.
Broadband India Forum president TV Ramachandran said, “Government should look at de-licensing the V band, while E band should have light licensing.” He added that conventional microwave cannot handle large data demand and, even though fibre is an excellent choice in terms of capacity, it is not feasible or cost-effective for many short backhaul distances, especially due to right of way issues involved. In urban and suburban or in dense areas, it’s difficult to bridge the last-mile gap between the fibre access point and the end-user building.
Mahesh Uppal, telecom analysts and director of ComFirst India, agrees with Ramachandran’s views. He said, “De-licensing V band ensures that no single entity has an exclusive right over it. It is different from both first come, first served method as well as the auction route. FCFS and auction both result in creating an exclusive right. De-licensing encourages optimal utilisation without additional cost of acquiring spectrum.”
The Cellular Operators Association of India, however, differs in the sense that it does not want de-licensing but allocation in a fair and transparent manner. It is not even in favour of auction but wants the Trai methodology to be followed, which means light licensing. COAI director general Rajan Mathews said, “The auction route is not the right approach as financial pressures will grow on the companies. Also, companies with no financing options will be left out as they will have to wait for fibre, which will adversely impact subscribers. Allocation of these bands can be taken up, but it should happen in a fair and transparent manner.”
Trai had recommended that both E and V bands should be opened with ‘light touch regulation’ and allotment should be on a ‘link to link basis’. It had said that E band carriers should be charged at Rs 10,000 per annum per carrier of 250 MHz each and there should be initial promotional discount of 50% for three years from the date of allocation of the first carrier in this band. In case of charging of V band carriers, it had said that it should be Rs 1,000 per annum per carrier of 50 MHz each. It has said that prices would be reviewed after five years based on deployment and usage.
The argument against auction is because there’s not much the government is going to get by doing so, unlike access spectrum. The value of a spectrum band depends upon various factors like ecosystem but the most important factor is its propagation characteristics. Lower frequency spectrum is more valuable compared to the higher frequency as the radio waves riding on the former travels farther, thereby requiring fewer base stations, which means less operational costs.
The value of E and V band spectrum is low because they have very poor propagation characteristics as they fall between 71 and 76 GHz and 81 and 86 GHz (E band), and between 57 and 64 GHz (V band). These bands are like fibre and can be used for broadband services but not for direct mobile connectivity.