Mobile phone operators who looked resigned to spending over R1 lakh crore ? if they were to win back their 900 MHz spectrum when it was refarmed ? have got a new lease of life with Planning Commission deputy chairman Montek Singh Ahluwalia suggesting the issue needed a more thorough analysis. Apart from this, state-owned BSNL and MTNL could end up paying around R35,000 crore if they wish to retain their 900 MHz spectrum, assuming the base price of this is kept at twice that of the 1800 MHz spectrum as suggested by Trai.
In a letter on Tuesday to all members of the inter-ministerial panel which has to take a final call on the matter, Singh wrote: ?I had indicated during the discussion that we need a more thorough analysis of the issues involved, keeping in mind the need to minimise disruption.?
Ahluwalia said contrary to the view that the issue had been discussed adequately with the industry, ?the Trai 2012 report did indicate that consultations have been held with the stakeholders? However, the stakeholders… preponderantly requested that refarming of spectrum may be part of a separate consultation process on grounds of equity, competition and potential disruption of mobile services on this account.? He added, ?I am also informed that the Telecom Commission has never considered a detailed paper with full information indicating what is the best methodology for refarming, especially given the international experience so far. The matter was most recently discussed in the telecom commission meeting held on October 15. However, as pointed out by the secretary, Planning Commission, to the EGoM, all that the Telecom Commission did was consider the three alternatives (partial, full and zero refarming).?
Nor was, Ahluwalia said, there any analysis of the pros and cons. According to industry estimates, were the telecom industry to surrender its 900 MHz spectrum and take the 1800 MHz spectrum offered by the government, this would mean reworking entire networks.
Cost estimates of this range from R1 lakh crore to R1.5 lakh crore.
The other issue, more serious, is the impact on telecom tariffs and rural telephony. If Rs 1-1.5 lakh crore must be spent, this means higher tariffs; it also means that operators will be reluctant to offer telecom services in rural areas where subscriber payouts are low. A good way to look at this is the fact that few operators with 1,800 MHz spectrum have large rural networks.
Ahluwalia finally emphasised that before the EGoM takes a call on refarming spectrum in the 900 MHz band, ?we should have a clearer view of what is going to be done with the 900 MHz spectrum after the licensees have been offered the 1,800 MHz spectrum at the discovered price. For example, will the 900 MHz spectrum be auctioned allowing existing holders to bid for it or will they have to accept the 1,800 MHz alternative and wait for whenever the 900 MHz spectrum is auctioned??
