The Cellular Operators Association of India will write to the DoT next week, requesting to defer spectrum auctions for the 700 Mhz band arguing that the base price kept for auction by the TRAI is too much and there is a lack of ecosystem for demanding such exorbitant prices.
The 700 MHz band has superior propagation characteristics to the other bands like 900 MHz and 1800 MHz and is best for 4G and 5G services. It can penetrate buildings and walls with ease and cover much larger geographical areas that do not have sufficient infrastructure.
“We will be writing to the DoT for deterring auctions of the 700 MHz band. The reason is that the ecosystem for 700 globally is not ready. So, asking us to pay the extraordinarily large amounts of money is only going to suck money out of the industry at a time when we have to make significant investments in our 4G networks in terms of rollout obligations and licence conditions,” Rajan S. Mathews, Director General, COAI, told this newspaper.
The Department of Telecommunication has also pegged the base price at a record high which the telcos are protesting against.
“We have asked them to reconsider the reserve price. You can take a quick look. If we pay Rs 57,000 crore; that price is probably the value of Idea Cellular today. So somebody can actually bid for Idea Cellular instead of 5 Mhz of spectrum. We are committed to letting the auction process discover the price but obviously there should be a more reasonable reserve price so that the market recovery process will decide what the ultimate price will be,” Mathews said.
Explaining that the ecosystem for full utilisation of 700 MHz band is not present at the moment, Mathews said, “It is a global phenomenon. It is not just India that can give the scale and scope in terms of the handsets as well as the networks. Both are critically important. We need a global demand structure, if not an Indian demand structure to get to that scope, scale and price point. So we are asking for it globally, as 700 emerges as one of the more utilized bands for 4G and 5G and LTE. That will take at least 2-3 years.”
Another demand of telcos and COAI is for a contiguous spectrum. “As a result of the historic way in which the 800, 900 and 1800 Mhz spectrum were originally allocated by the government of India, contiguity of spectrum was not an issue because in the 2G you don’t need a contiguous spectrum. However, when you go to 3G and 4G services, you need contiguous spectrum. As a result, now if the spectrum is going to fetch the prices that are demanded for 5G type services, you’ve got to make sure that the spectrum is made contiguous. Take all these spot frequencies from various operators. Reallocate them so that you can get 5 Mhz of contiguous spectrum. That can then be put up for auction,” he added.