DoT has high hopes for February auction

4 Aug 2014

India’s Department of Telecommunication (DoT) expects to generate up to INR150 billion (USD2.459 billion) through the auction of wireless spectrum in February 2015, with frequencies in the 800MHz, 900MHz, 1800MHz and 2100MHz bands due to go under the hammer. The Economic Times writes that the DoT has set a tentative launch data of 3 February for the sale, with bidders expected to be finalised by 28 January. The auction is primarily to cover the renewal of expiring concessions, although previously unsold airwaves are also being made available. With regards to pricing, the Telecom Regulatory Authority of India (TRAI) will make its recommendations on costing levels for the 900MHz and 1800MHz bands by October, although the DoT is yet to make an official request for recommendations on 2100MHz prices. The 800MHz band, meanwhile, is likely to be problematic, and the DoT, TRAI and Telecom Commission have not finalised a plan for spectrum in the range. Traditionally used in India for CDMA-based services, the spectrum can also be used for 4G services if the frequencies sold are contiguous. If this is the case, the regulators will likely increase the price tag for the airwaves, much to the chagrin of the remaining CDMA providers.

A further area of concern is the absence of any kind of safety net for Vodafone and Idea Cellular, whose 900MHz licences are due to expire. Should either fail to win back their concessions, there are insufficient spectrum resources in the 1800MHz band to plug the gap –potentially jeopardising their ability to continue offering services. Dismissing industry concerns, a DoT official was quoted as saying: ‘We understand that in the previous auctions there was enough spectrum in the 1800MHz [range] for telecom operators to fall back upon in case they couldn’t win back their 900MHz, but that was out of default and not design.’ The loss of crucial 900MHz resources is a very real possibility, with aggressive and deep-pocketed newcomer Reliance Jio Infocomm Ltd (RJIL) keen to increase pressure on the incumbents as it prepares to launch services next year.