CEOs of Airtel, Vodafone and Idea approach FM to solve refarming issue

Telecom Lead Asia: Bharti Airtel CEO (India and South
Asia) Sanjay Kapoor, Vodafone India MD and CEO Marten Pieters and Idea Cellular
Managing Director Himanshu Kapania have sought Finance Minister Pranab
Mukherjee’s intervention to ensure that they are not asked to migrate to 1800
Mhz of spectrum.

In a letter to the Finance Minster, they said if the TRAI proposal of spectrum
refarming is implemented it may result in call rates going up by as much as 64
paise a minute.

TRAI has proposed that existing operators migrate from current 800 MHz and 900
MHz spectrum to 1,800 MHz when their permits come up for renewal, at a fee
discovered through auction.

CDMA operators’ body AUSPI, however, is in favor of spectrum refarming. Once
accepted, CDMA players will have to use 1900 Mhz band instead of the present
800 Mhz band for transmitting signals for mobile services.

The operators said if the incremental investment in refarming and spectrum
costs are passed on to the consumer, the average tariffs will go up as much as
64 paise per minute (30 paise due to refarming and 34 paise for spectrum

After moving to 1800 MHz, operators using 900 Mhz spectrum would need to
replace 2.86 lakh base stations and install an additional 1.71 towers to
provide equivalent coverage.

This would require an incremental Capex of Rs 54,739 crore and incremental
annual operating expenditure of Rs 11,762 crore, according to Analysys Mason

An additional Capex of about Rs 26,653 crore would be required to deploy new
towers to support the incremental base stations, it added.

The operators said they would have to write off existing 900 Mhz assets that
will cost an estimated Rs 22,310 crore.

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