Re-farming of spectrum will harm incumbents: Assocham

Telecom Lead India: The re-farming of spectrum will
affect the profits of incumbent service providers, according to Assocham
(Associated Chambers of Commerce and Industry).


TRAI has recommended re-farming of the entire 800/900 MHz
holding at the earliest before the first set of licenses come up for renewal in
2014. Currently, the old incumbent operators hold spectrum in these two bands.


TRAI has recommended that for these, the 900 and 800 MHz
bands should be replaced with the 1800 MHz band and the vacated bands should be


Moreover, implementation of these recommendations could
bring a fresh revenue bonanza as high Rs. 300,000 crore to the
fiscally constrained government.


In a letter to Prime Minister Manmohan Singh and
Communications Minister Kapil Sibal, Assocham said, “The proposed
immediate re-farming of spectrum would be detrimental for incumbents like
Bharti Airtel, Idea Cellular, Vodafone, MTNL/BSNL, Reliance Communications and
Tata Teleservices who have considerable share of spectrum in the 900/800 MHz


The letter further noted that the re-farming is likely to
impact profitability owing to an increase in network operating expenditure.

Assocham also said that the operators whose licenses have
been cancelled and who have to re-bid may not be able to put together a viable
business case with recommended reserve price for spectrum.

The TRAI has recommended a reserve price of Rs.3,622 crore for 1 MHz pan-India
spectrum, which is around 10 times higher than the price at which 2G licences
were allocated in 2008 under then telecom minister A. Raja.


TRAI reduces reserve price for CDMA, no change in stand on 2G


Recently, TRAI proposed to reduce the reserve price
of CDMA spectrum but made no change in its price recommendation
for GSM spectrum auction. The regulator suggested a cut in the
reserve price of CDMA spectrum from twice to 1.3 times the base price
recommended for the 1,800 MHz band. The reduction, however, will be valid only
in states where airwaves less than 5 MHz are available for auction.


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