TRAI proposal on refarming to cost incremental Capex of Rs 54,739 crore

Telecom Lead India:
Research agency Analysys Mason said that the TRAI proposal on refarming will
cost incremental Capex of Rs 54,739 crore to Indian telecom industry.

The recent TRAI proposal on refarming will have a
substantial cost to the industry, result in an increase in retail tariffs, and
cause significant inconvenience to consumers.

The report points out that the maximum harm will be to the
rural consumers, the already-connected, as well as the
large population of waiting-to-be-connected.

BhartiAirtel, Idea Cellular and Vodafone India commissioned the

The implementation of current refarming recommendations will
require replacement of 286,590 existing 900MHz base stations with 1800MHz
equipment, in addition to deployment of an additional 171,954 new base stations
on 1800MHz to fill coverage gaps.

This will result in an incremental Capex of INR 54,739 crore,
and incremental annual opex of INR 11,762 crores.

If the incremental investment in refarming and the costs of
spectrum are passed on to consumers in the form of enhanced retail voice
tariffs, the overall tariffs will go up by as much as 64 paise per outgoingminute
(30 paise due to refarming and 34 paise from spectrum investments).

The impact on environment due to these additional sites will
be 5.4 million tons of CO2, which is equivalent to pollution caused by 4.5
million cars annually. 

The current recommendations lack the rigour and
comprehensiveness of regulatory impact assessment as observed in other markets
where refarming has been carried out or is under process. Key operational
considerations such as the time frame required for such large scale migration of
sites, availability of both 900MHz and 1800MHz spectrum during the transition
phase, as well as availability of sufficient spectrum to support existing voice
traffic along with new technologies such as UMTS/LTE have not been analysed
thoroughly in the current recommendations,” said Pankaj Agrawal, co-head,
Analysys Mason.

Analysys Mason suggests that it is imperative to have a
dedicated and detailed consultation process for spectrum refarming, which should
include rationale, objectives, regulatory impact assessment and operational

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