Analysys Mason report on spectrum refarming in Indian telecom market

Telecom Lead India: Mobile operators such as Bharti Airtel, Idea Cellular, and Vodafone India have
commissioned Analysys Mason to examine the
recommendations proposed by the Telecom Regulatory Authority of India (TRAI)
on spectrum refarming in April 20122, and critically evaluate the underlying
rationale and procedural considerations in developing these recommendations. 

The remainder of this document is laid out as follows: 

* Section 3 reviews TRAI consultations on spectrum
refarming since 2009 to provide a background for the current recommendations on
refarming of 900MHz spectrum

* Section 4 focuses on evaluating the impact of refarming
of 900MHz spectrum on consumers, the environment and business viability of
operators in the Indian market

* Section 5 analyses the practice adopted by regulators
in international markets for spectrum refarming, including the consultation
process and approach

* Section 6 evaluates the critical assumption that
liberalisation of the existing 900MHz and 1800MHz spectrum bands will result in
a material increase in their value

* Annex A includes results and assumptions of our model
to quantify the impact of refarming of 900MHz spectrum on consumers, the
environment and business viability of operators in India


Regulatory context for spectrum refarming in India

It is imperative to understand the regulatory context
leading to the build-up of the current recommendations on spectrum refarming.
If we consider the consultation process, industry responses and subsequent
recommendations of TRAI, we find that:

* The issue of refarming has been consistently brought up
in consultation documents, apparently out of context, while TRAI is evaluating
other elements of spectrum management process such as spectrum auction and
pricing. There is a consistent trend of such out-of-context inclusion of
refarming discussion across multiple consultation papers and recommendations
from 2009 onwards

* The TRAI consultation papers and recommendations
mention that the refarming of 900MHz spectrum will have a significant impact on
operators, and hence necessitate a separate consultation process. Subsequent
operator submissions have also repeatedly mentioned that a separate, dedicated
consultation process for refarming is imperative. However, for some reason, these
requests and commitments have been consistently ignored, with only a
superficial treatment of the impact of refarming in consultation papers


The refarming discussion was started by TRAI in 2009,
from a broader perspective of achieving the objective of enabling spectrum to
move to its most efficient users and uses”. This included the objective of the
use of spectrum band from current non-commercial uses (such as security,
navigation) to commercial uses. In addition, this included allowing a band
under commercial use to be reused for deploying a newer or advanced technology.

It’s interesting to note that this consultation followed
a reference from the Department of Telecom requesting the regulator to examine
the report of an expert committee on the Allocation of Access (GSM/CDMA)
spectrum and pricing” and did not include refarming in its mandate. The
committee report had mainly focused on spectrum allocation and pricing, as well
as merger, transfer and sharing of assigned spectrum. TRAI also mentioned in this
paper that additional issues which were not covered by the committee report
also need to be addressed, specifically refarming of spectrum.

This consultation was followed by TRAI recommendations in
May 20103, which expanded the scope of refarming to include the refarming of
900MHz spectrum, and grant of 1800MHz spectrum in lieu. The recommendations
mentioned that, there is a need to carefully assess the likely impact of
re-farming of 900MHz from the perspective of traffic management, frequency
coordination, site optimization, management of voice & data traffic loads
etc. as it poses significant challenges for operators. The Authority is of the
opinion that even as there should be a definite decision to refarm the
spectrum; the details are to be worked out in greater detail, for which a
separate consultation process may be necessary.” However, no separate
consultation was conducted by TRAI on the issue of spectrum refarming.



The need for a separate consultative process to discuss
the issues involved in refarming was again reiterated by TRAI in its November,
2011 response to DoT4.

However, the detailed consultation process suggested in
the 2010 recommendation and November 2011 letter was not addressed. In February
2012, the Hon’ble Supreme Court of India in its judgment dated 2ndFebruary 20125directed
the TRAI to make fresh recommendations, for grant of licence and allocation of
spectrum in 2G band in 22 Service Areas by auction, as was done for allocation
of spectrum in 3G band.”

TRAI floated a consultation paper on auction of spectrum
in 20126 which included an analysis of spectrum availability by bands, proposed
auction design and quantum of spectrum to be auctioned. However, in addition to
these analyses, the consultation paper also included the issues of
liberalisation of spectrum as well as refarming, and outlined three options for
the refarming of 900MHz spectrum, and sought comments from industry

The need for such a consultation was also stressed by
some of the operators holding spectrum in the 900MHz band, before TRAI
finalised its recommendations.

* In its response, Bharti Airtel mentioned that, It is
submitted that refarming of spectrum in 800/900 MHz band has larger
implications and requires detailed deliberation on issues concerning continuity
of services to the existing customers, financial implications, network
re-engineering and optimization etc.”

* Idea Cellular submitted, We are surprised that the
Authority has suddenly chosen to link the issue of refarming with the proposed
auction process. We believe the topic of refarming of 900/800 MHz for its
current GSM/CDMA use is a separate topic and the same needs to be properly
discussed in the Public forum through a separate consultation process.”

* Vodafone India in its response noted that “… issues
pertaining to -refarming’ do not flow out of the Supreme Court judgment
pursuant to which the TRAI is carrying out the present consultation”¦”


The need for a separate consultation process for
refarming was again ignored by the TRAI, and in its April 2012 recommendations,
it recommended that refarming of 900MHz should be carried out ‘progressively’
and that this spectrum should be replaced by spectrum in the 1800MHz, which
should be charged at the price prevalent at the time of re-farming.”

In this report we do three things:

* We assess the impact of refarming by thoroughly
examining its impact on consumers, the environment and operators

* We review how regulators in international markets have
examined the refarming issues



We evaluate TRAI’s assumption that so-called
liberalisation of 900MHz and 1800MHz spectrum will result in a material
increase in value of these bands

We find that the refarming proposed by TRAI will have
significant detrimental effects on consumers in the form of higher prices and a
poorer quality of service, on the environment because of higher energy
consumption and on the long-term viability of operators.

We also show that TRAI’s proposed approach is at odds
with the practice followed by the regulators in international markets.

Furthermore, we do not believe that liberalising the use
of 900MHz will lead to a material increase in its value because a) it is
impractical to clear these bands given the demand for voice traffic, and b) the
market for data services is still nascent in India and likely to be adequately
served by 3G in 2100MHz for the foreseeable future.


Impact of refarming on consumers, the environment and

Operators with 900MHz band will need to replace
286,590 existing base stations and install an additional 171,954 base stations
to provide equivalent coverage on 1800MHz frequency

The first three operators in each circle in the Indian
mobile market were initially assigned the 900MHz spectrum band to start their
operations, and built their networks using the 900MHz band. Over years,
operators with 900MHz spectrum (seven operators in total, including BSNL and
MTNL) have expanded their networks to include rural areas and now have a
substantial presence across urban and rural areas (100% population coverage in
urban areas and more than 80% population coverage in rural markets).

Given that operators with 900MHz have deployed 900MHz
base stations over years, and the TRX to upgrade these bases stations are not
available with OEMs, all these base stations will need to be replaced with
1800MHz base stations. On an overall basis it is reasonable to conclude that
the 900MHz base stations for operators using 900MHz spectrum will need to be
replaced with 1800MHz base stations in rural as well as urban areas. In addition
to replacement of equipment, operators will need to deploy additional sites on
1800MHz band to fill coverage gaps, given the lower coverage radius achieved on
1800MHz versus 900MHz.

We find that at an overall level, the active equipment
would need to be replaced on nearly 286,590 sites and additionally about
171,954 new sites would need to be deployed to provide equivalent coverage on
1800MHz frequency band. We estimate that the active equipment will need to be
replaced on the existing 94,670 sites in urban areas, and an additional 56,802
base stations on 1800MHz will need to be deployed to provide equivalent
coverage. In rural areas, we estimate that the active equipment will need to be
replaced at about 191,920 site locations, and an additional 115,152 base
stations. Please refer to Figure A.1 and Figure A.2 in Annexure for circle wise

The replacement of 900MHz base stations and
deployment of additional sites on 1800MHz will result in an incremental capex
of INR 54,739 crores, and incremental annual opex of INR 11,762 crores

We estimate the capex for replacement of 900MHz sites and
deployment of new 1800MHz sites to be INR 18,082 crores in urban areas. For
rural areas, the replacement capex and the incremental site capex is estimated
to be INR 36,657 crores.

In addition, deployment of additional sites on 1800MHz
will lead to an incremental annual opex of INR 11,762 crores in urban and rural
areas. This includes tower rental, electricity and diesel charges, andother associated costs for additional towers that will be
deployed on 1800MHz spectrum band. Please refer Figure A.3 and A.4 in Annex A
for circle wise calculations. Interestingly, the major capex impact is on
account of the fact that existing operating networks will have to be replaced
and will account for about 58% of the total capex. The better propagation
characteristics of 900MHz band as compared to 1800 MHz band will have a smaller
contribution to this overall impact.

In addition, operators will also have to write-off their
existing 900MHz assets estimated at INR 22,310 crores. At an industry level, an
additional capex of about INR 26,653 crores will be required to deploy new
towers to support the incremental base stations.

There is a risk of reduction of existing geographic
coverage by as much as 40 percent and loss of connectivity for 70 million subscribers,
in case operators do not match coverage due to business case viability and
operational feasibility

As the current network has been designed and built to a
900MHz frequency plan, the conversion of this network to 1800MHz frequency plan
will result in severe coverage gaps, even with the use of small cell and
in-building solutions to address coverage issues.


Such a migration is bound to create a coverage
discontinuity across residential and commercial areas, with an increase in
number of call drops, at least during the period of migration and optimization,
and most likely for many years in the foreseeable future. In some instances,
there might be restrictions on the number of sites which can be deployed (such
as in cantonment areas), which might also have an impact on coverage. The
impact of migration to 1800MHz in urban areas will be primarily felt in terms  of deteriorating quality of service in urban
areas, which includes commercial complexes, office buildings and public areas.

More importantly, at the current ARPU levels, increasing
the capital expenses by 1.6x will have a significant impact on business
viability of services in rural areas. Operators are likely to reduce the areas
that they cover, which may result in a potential decline in rural tele-density.
In such a situation, we believe that the geographical coverage could reduce by
as much as 40%, primarily due to the lower coverage achieved using the 1800MHz
band as compared to the 900MHz band.

Such a reduction of coverage is estimated to directly
impact the connectivity to about 70 million subscribers. More importantly, due
to the inherent two way nature of the communications business, the subscribers
in other markets will also not be able to reach out to this 70 million user
base, thus directly impacting the utility of their mobile connections.

In addition, this will also have a financial implication
with a reduction in revenues for operators offering services in these areas.

The overall process of migration from 900MHz to
1800MHz may take up to three years for completion, during which the quality of
service will be severely hit

The current 900MHz network has been deployed by operators
over a period of about sixteen years, and it will take a significant amount of
time to physically replace equipment on these 900MHz sites and build additional

The current site deployment experience suggests that not
more than 400 sites per month can be converted from 900MHz to 1800MHz for one
operator. For an operator with 10,000 sites in a circle, such a migration plan
will require more than two years for the network replacement and deployment to
complete in that circle. For migrating all the existing 900MHz base stations to
1800MHz, along with deployment of additional 1800MHz sites on an all India
basis, we believe that up to three years will be required for the two900MHz
private operators in each circle.

In this transition phase of migration from 900MHz to
1800MHz frequency, the overall quality of service will suffer as the networks
will need to be kept live for a hot swap and it will take some time to optimise
coverage. The decline in service quality will get reflected in an increase in
the number of dropped calls, patchy network coverage, as well as a reduced call
completion rate.

The business case for a new operator acquiring 900MHz
spectrum at the proposed prices will not allow for expansion to rural markets
to address these coverage gaps

The business economics, as well as existing market
scenario of muted data demand (especially in rural areas) suggests that the
operator focus will be primarily concentrated in urban areas in the initial
years. This will keep the coverage gaps in rural areas unfilled for a long
time, with an impact on service continuity. Even the experience of new entrants
on 1800MHz in India market suggests that the initial focus of service offerings
has been urban and semi-urban areas, with rural areas being left out,
presumably due to relatively poor economics.

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 61 paise per
minute, with a higher impact on tariffs in non-Metro circles

In addition to connectivity and coverage issues,
consumers will also face a steep increase in tariffs as a consequence of
additional investments by operators in refarming. The pan-India impact of
investments in spectrum has been estimated to be up to 34 paise per minute12.
The additional impact of refarming will be as high as about 30 paise per minute as a result
of increased capex and opex for replacing existing 900MHz sites with 1800MHz
sites, deploying new 1800MHz sites for addressing coverage gaps. Figure 4.3
provides details on such an impact on tariffs by different category of circles.



If the cost of refarming is not passed on to consumers,
then the EBITDA margins of operators with 900MHz spectrum holdings will decline
by about 8% If the cost of refarming is not passed on to the
consumers, incremental operational expenditure from additional sites will
result in a decline of about 8% in EBITDA margins for operators with 900MHz
holdings, as illustrated in Figure A-6 in Annex A.

Such a decline in profitability will only impact
operators using 900MHz spectrum, and will skew the competitive parity in the
market place with other operators. More importantly, the current scenario of
liquidity crunch and high total debt (Total debt of about INR 185,720 crores as
of FY12 with Debt to EBITDA ratio of 4.8714) burden faced by the industry is
likely to further impact existing operators using 900MHz spectrum as they will
not be able to invest in to 2G and 3G network expansion, as well as deployment
of new technologies such as LTE.

The installation of additional sites will increase
diesel consumption and contribute to environmental pollution equivalent to that
of an additional 4.5 million cars

We estimate that the migration from 900 MHz to 1800 MHz
will require a total of about 171,954 additional base stations to maintain the
same coverage in rural areas. This would mean that 107,471 additional towers
will be deployed pan India (assuming an average tenancy of 1.6 base stations
per tower).

Also, a telecom tower on an average requires 6 kWh to 8
kWh of energy per hour per tower, which will lead to an additional 2.7 billion
kWh of electricity consumption per year. For every litre of diesel, about 2.48
kg of CO2 is emitted and for every kWh of electricity consumed, 0.84 Kg of CO2
is emitted. Thus, the additional 171,954 sites will result in an incremental
5.4 million tons of CO2 emitted per year. This is equivalent to CO2 emitted by
about 4.5 million cars (petrol car with engine size of 1000cc and average running
of 1000 Kms per month) in a year.

Also, if a new operator acquires pan India spectrum in
the 900MHz band after refarming, it will have to deploy about 107,600 sites in
order to provide same coverage as current operators using 900MHz spectrum. This
will mean an additional deployment of towers, leading to an additional CO2
emission of almost 3.4 million tons per operator per year, as illustrated in
Figure 4.4. If three new operators acquires pan India licence, then these
operators will have a total carbon footprint of 10.2 million tons per year.



Practice followed by other regulators

International regulators follow a much more rigorous
consultation process for refarming, accounting for key near term and long term
issues for consumers and industry

The TRAI consultation and recommendations lack the
rigour, and comprehensive review of potential impact on consumers and industry
considered by regulators in global markets while considering critical issues
such as refarming of spectrum.

Some of the key questions which have been considered by
almost all these regulators, and should have been considered for India as well
include the following:


* Will consumers have access to same level of coverage
and service quality after refarming?

* Will there be an increase in tariffs due to the
additional investments required?

* Will there be continuity of GSM services for existing

* Will the consumers be able to bear the cost of new
technologies (handsets, data pricing)?


Technology maturity

* Is there a reasonably mature ecosystem for new

* Is there demand for new technologies such as UMTS /

* Will refarming of spectrum result in a faster adoption
of new technologies?



* Will there be a business case for existing operators to
continue services?

* What will be the increased investment for operators to
maintain equivalent coverage?

* How many existing sites will be affected and how many
new sites will have to be built?


Economic outcomes

* What will be the impact on teledensity?

* What will be the impact on rural coverage?

* What will be the impact on overall economy, if the
coverage is reduced and the connected become unconnected?


Spectrum pricing and auctions

* Will revenues from spectrum auction be higher than
licence extension?

* If auctioned, what should be the basis of determining
auction price?



* Is there competitive parity amongst existing holders of
licences across spectrum bands?

* Are there new entrants looking to get spectrum in a
particular frequency band?


Regulators have made sure that the stakeholder issues are
addressed in a fair and objective manner, even if it requires a multi-year consultation
process to do so In the case of UK, Ofcom started the consultation process
on liberalisation of 900MHz and 1800MHz band in September 2007. In February
2009, it initiated the second consultation process focussing on the future of
the spectrum currently used to provide 2G and 3G mobile services in the UK.
Finally, in January 2011, it decided to liberalise the 900MHz spectrum in hands
of incumbents without any change in quantum of spectrum holding.


Full withdrawal of spectrum resulting in the shutdown of
existing operational networks is unprecedented. Partial withdrawal has
generally happened to allow entry for new operators, but has impacted only a
marginal portion of the overall spectrum holdings

We have not come across any refarming situation globally
where a specific band of spectrum (especially 900MHz) has been fully withdrawn
for refarming. Partial withdrawal has generally happened to allow entry for new
operators, but has impacted only a marginal portion of the overall spectrum

In all the cases the withdrawal of spectrum from
incumbents has been partial (mostly 2×2.5MHz of the total spectrum holding of
the operator in the 900MHz band), and has formed a very small share of the
total spectrum holdings of existing operators, as illustrated in Figure 5.3. In
these markets, incumbent operators had a lot of spectrum in multiple bands
(such as 900MHz, 1800MHz, 1900MHz, 2100MHz and 2600MHz) and withdrawal of a
small part of the spectrum will not impact their on-going operations
substantially. Even in these markets, the regulator carried out the withdrawal
activity through collaborative discussions with service providers.



More importantly, in these markets, incumbent operators
with 900MHz spectrum are still using the spectrum for GSM services rather than
UMTS. As of February 2012, only Hi3G (Sweden), Orange (France) and SRF (France)
have launched UMTS services in 900MHz.16 Also, in these markets, the 900MHz
band includes the EGSM spectrum of 10MHz+10MHz, which has been given to some
operators in India that have used it to deploy CDMA services.

In summary, partial withdrawal of spectrum for
competitive entry has been the primary approach to refarming, with adequate
mechanisms in place to ensure that operators have sufficient spectrum across
bands to provide services across technologies.

Implementation of the current recommendations on
refarming will have an enormous operational element which has not been given
sufficient consideration


Also, the recommendations have completely ignored the
on-the-ground operational process required for migration of two live networks
simultaneously from one frequency band to another, while maintain customer
connectivity. The key elements which have been ignored include:

ï‚· Spectrum availability For the period of migration,
operators will need access to both the spectrum bands (900MHz and 1800MHz) to
ensure that customers do not get disconnected from their service. The
recommendations do not consider such a scenario and appear to have adopted more
of an academic approach rather than an on-the-ground analysis to actually
understand the impact of these recommendations

* Interference issues – The migration of 800MHz network
to 1900MHz band will lead to interference with the existing 2100MHz 3G
operations as this band is adjacent to the uplink band on the exiting 2100MHz
3G network. The interference issues, if not resolved, will make the refarming
of 800MHz impractical. This might lead to disparity among operators as 900MHz
refarming, if it happens, will be carried out in next few years (at least for
two operators across circles) while the refarming of 800MHz spectrum may not
become possible as a result of interference.


All the above operational issues need to be given
sufficient consideration during the consultation process as well as while
developing the recommendations along with key stakeholders’ participation at
all the steps of the process.



Impact of refarming on value of spectrum

TRAI believes that refarming of spectrum in the 900MHz
band will allow for more efficient use of spectrum and ultimately result in
higher revenues for operators through deployment of new technologies. This is a
theoretical argument as current market conditions in India suggest that the
incremental economic value of this so-called liberalised spectrum may be
limited due to a range of factors such as potential demand for wireless data
services in the near future, and the maturity of the device ecosystem.

The so-called liberalised 1800MHz spectrum will have
to deployed to support existing voice users, with limited data revenue
potential due to ecosystem maturity issues

Operators using 900MHz spectrum currently support 456
million users (51 percent of the total mobile user base) on their networks. If the
proposed recommendations are implemented and this user base is migrated to
1800MHz, operators will still need to have access to GSM based voice services.
Even in global markets, the expectation is that GSM (on 900MHz) will at least
continue up to the year 2020, and will remain the predominant technology for
carrying voice. For India, given the voice-centric nature of the market, we expect
that GSM based services will continue up to the year 2025.

Also all the proposed new technologies (UMTS, LTE) to be
deployed on the so-called liberalised spectrum need at least 2×5MHz of
spectrum. For markets such as Mumbai and Delhi, running voice services in
addition to deployment of data technologies is virtually impossible without a
significant degradation in quality of service. The availability of such limited
spectrum coupled with the need to support voice users makes the liberalisation
argument academic.

Also, the market for data services is still immature in
India and likely to be adequately served by 3G in 2100 MHz for the foreseeable
future. The demand for data remains been limited due to the high prices of
devices and services, and most importantly the lack of relevant content,
applications and use cases. If we consider the current state of 3G service
offerings in the 2100MHz band, industry inputs indicate that only 4 to 5% of
the overall mobile user base has a 3G-enabled phone, and the adoption of 3G
services remains limited. With the right market enablers, this adoption will
grow over years, but as of today, data services remain a small part of
operators’ overall business even on a mature technology and device ecosystem
such as 2100UMTS.

Compared to 2100UMTS, the 1800LTE technology and device
ecosystem remains relatively immature, especially for providing data services
in emerging markets. Also, the lack of voice support on LTE necessitates the
deployment of GSM on 1800MHz, or else creates dependence of additional coverage
layer for providing voice support. This means that the so-called liberalised
1800MHz spectrum will continue to be primarily used for providing voice
services using GSM technology, and the objective of absolute revenue enhancement from increased penetration
of data services will not be realised in the near foreseeable future.

The lack of such an upside from data, and the requirement
to carry GSM based voice services for existing users completely defeats the
objective of the so-called liberalisation of spectrum through refarming.

Despite a lack of incremental upside from so-called
liberalised spectrum, the price of spectrum been set at a substantially high
level . Although the revenue upside from the liberalisation of
1800MHz spectrum is uncertain, the reserve price for this band has been set at
a substantially high level in comparison with international benchmarks (as
illustrated in Figure 6.1). Such a high price will also have a cascading impact
on the prices of spectrum in the 900MHz and 700MHz bands.



Given this market and economic context, it is possible
that none of the Indian operators bids for 1800MHz spectrum given its high
reserve price. In some cases, operators may not have any other alternatives but
to get access to the 1800MHz spectrum block to continue their operations. This
mainly applies to new operators whose licences have been cancelled after they
have made significant investments in capital expenditure (capex) and market
development. More importantly, these new operators are experiencing substantial
EBITDA losses17 even after four years of operation, and given this scenario,
the higher economic value of spectrum will not encourage these operators to
participate in the auction process. In summary, the spectrum price will
in effect become an administered price rather than a price discovered by the
market participants in a free and non-coercive fashion.

Also, for operators that have already invested
substantial capex in acquiring 2100MHz spectrum and rolling out networks, the
utility of the liberalised 900MHz spectrum will be limited.

TRAI’s recommendations also create an uncertainty about
the future auctions of spectrum in the 900MHz band. The reserve price for
1800MHz spectrum is very high. If such a price is applied to licence
extensions, and if licensees further incur an exorbitant cost to set up
additional sites and migrate to 1800MHz due to refarming, then the purchasing
capacity of such operators for later auctions will be significantly impacted.
If the licences have an extension clause, then it would be right to presume
that the continuity of spectrum, which is an underlying feature of the
established networks and the agreements, should also be given in the extension
of the licence. In summary, such a withdrawal of 900MHz spectrum does not
appear to be in the overall economic interest.

Given the limited holdings, the practicalities of
clearing spectrum need to be considered Operators have limited holdings of spectrum and if 900MHz
spectrum is refarmed, then they will be left with very little spectrum in which
to accommodate the entire volume of voice traffic. Further since new
technologies such as UMTS and LTE require a minimum of 5MHz spectrum, the
quantum of spectrum left for GSM to carry voice would be minuscule.

Anecdotal evidence suggests that there already exists
a technology neutral environment in India. The existing licences are technology neutral. Given that
the underlying spectrum was assigned as part of the licence, it may be
concluded that the allocated spectrum can be used by operators to deploy any
technology of their choice.

An evaluation of various documentation and responses by
the Department of Telecommunications also supports this position. Further,
market evidence of some operators using the 800MHz spectrum in a liberalised
fashion to provide EVDO-based data services also suggests that the technology
environment in India remains liberalised.



Conclusions and next steps

It can broadly be concluded that the current
recommendations and the preceding consultation on spectrum refarming lack the
rigour and considered thought required for addressing issues with such
significant implications. Implementing these recommendations in their current
form will not be beneficial for the consumers, the environment, as well the
business viability of operators. In summary, the proposed refarming will have a
substantial cost to the industry, increase retail tariffs and cause significant
inconvenience to consumers as also adversely impact the environment, with no
benefit to any stakeholder.

We believe that given the above regulatory context, and
the clear gaps in the consultation approach adopted to develop the current
recommendations, it is imperative to have a dedicated and detailed consultation
process for spectrum refarming at the earliest. Such a consultation paper
should include rationale for such refarming, regulatory impact assessment on
consumers, the environment and industry participants, operational
considerations, and provide a fair chance for operators to present their views
and perspectives.

By Pankaj Agrawal, Sourabh Kaushal and Ashwinder Sethi at Analysys Mason India
[email protected]