Telecom Commission issues new recommendation for 900MHz spectrum

1 Nov 2012

India’s mobile network operators could be allowed to retain 2.5MHz of spectrum when their respective 900MHz concessions come due for renewal, following a revised recommendation issued by the Telecom Commission, the apex decision-making body of the Department of Telecommunications (DoT). According to the Indian Economic Times, the development comes after the Commission convened to reconsider its previous – and controversial – recommendation that incumbents should give up all spectrum in the 900MHz band at the time of their licence renewal. A conclusive decision regarding the reallocation of spectrum will not be made by the Commission however; instead a panel of ministers on spectrum headed by finance minister Palaniappan Chidambaram will make the final call on the matter.

Commenting on the outcome of the Commission’s meeting, the report cites an unnamed official as saying: ‘The Telecom Commission favours two options – allowing telcos to retain 2.5MHz of airwaves in the 900MHz band, or full refarming (taking away all spectrum in 900MHz and selling it). However, it has decided to place all three possible models before the Empowered Group of Ministers (EGoM), with the third option being to allow telcos retain 5MHz in the 900MHz band. The commission is completely against the third option of permitting telcos to retain 5MHz.’ The EGoM is now expected to meet today to consider the options before it.

As previously reported by CommsUpdate, in September 2012 it was actually announced that India’s telecom regulators would not make a decision on spectrum refarming until after the upcoming 2G auction. Whilst the government has given the green light to refarming the 900MHz band when the current licences expire, the DoT at that date was said to be mulling whether to allow cellcos to retain some of their spectrum in that range or require them to repurchase the frequencies through auction. DoT proposals from April this year suggested reserve prices of between INR131 million and INR14.345 billion (USD2.47 million and USD26.99 million) per MHz of spectrum, depending on the circle, twice the value it set for 1800MHz frequencies. Unsurprisingly, the prospect of refarming has provoked strong opposition from the nation’s cellcos, which threatened that they would be forced to increase tariffs to absorb the additional costs.