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Corporate Nov 24, 2012

Bharti, Voda, Idea want govt to give spectrum used by CDMA services

By Sindhu Bhattacharya

New Delhi: The three big GSM telcos, Bharti Airtel, Vodafone and Idea Cellular, now want a finger in the 800 Mhz pie as well. Till now, this frequency band has been used for CDMA services in India.

In a joint letter to telecom minister Kapil Sibal earlier this week, the chiefs of all these companies have proposed that they be allotted spectrum in the 800-900 Mhz band. The 900 Mhz frequency band is currently being used by GSM players to offer 2G services but the Government has already said they will have to surrender spectrum in this frequency through 'refarming' by mid next year and can then ask for more spectrum in the much less efficient 1800 Mhz band at market discovered prices.

Now, with the prospect of refarming looming large, the GSM companies are using twin pleas to substantiate their claims: they want refarming to be stopped and also say that since not a single CDMA operator came forward to ask for more spectrum in the just-concluded auctions, the spectrum in the 800-900 Mhz band should be allotted for GSM operations instead.

AFP

So in effect, the three GSM players want not only to keep the 900 Mhz spectrum to themselves, they are now asking the government to allow them to also use the 800 Mhz band for GSM services.

In the letter that has been seen by Firstpost, the chief's of the three telecom companies, Sanjay Kapoor, Himanshu Kapania and Martin Pieters, "We recommend that the 800 Mhz spectrum band be harmonized with the international band plan to become part of an extended 900 Mhz band. This will increase the availability of spectrum in the 900 mhz band by up to 10 Mhz or over 40%.

"If the DoT were to reconfigure the existing 800 Mhz spectrum band.....the same can be deployed to upgrade existing GSM services or introduce HSPA+ services and other latest technologies for the benefit of Indian society".

It is interesting to note that the GSM biggies have repeatedly referred to 'diminishing interest of operators in CDMA' and suggested that the existing CDMA operators be moved to a lower frequency band (869-879 Mhz) to free up 10 Mhz spectrum in the 800-900 Mhz frequency bands.

The three companies have also pointed out that that though 25 Mhz of spectrum is currently marked for GSM services in the 900 Mhz band, the actual allocation by DoT to Indian mobile companies is only 18.8 Mhz in most circles, with a maximum of 22.2 Mhz in Delhi and Mumbai circles. The GSM biggies want whatever spectrum in this band being currently used by the Railways to be vacated so that more spectrum is made available to them.

If the government does agree to this proposal, it may get willing participants in a re-auction it may hold for the 800 MHz band of spectrum. A high reserve price for CDMA spectrum deterred even telcos like Tata Teleservices which had lost licences awarded by former telecom minister A Raja and needed to win back spectrum in at least select circles.

In their letter, the GSM telcos have sought a "reasonable" reserve price for any future auctions in the 800-900 mhz band. The 800 MHz spectrum was priced 1.3 times the 2G spectrum at Rs 18,200 crore for 5 MHz.

Obviously, the CDMA players are not too happy over this development. They have already criticised any such demand, saying the government cannot possibly ask them to vacate the 800 MHz frequency just because GSM players may participate in any fresh auctions.

As of now, CDMA operations happen in the 824-844 MHz band for uplinking and 869-889 MHz band for downlinking. An official working with a prominent CDMA telco had told Firstpost earlier that "All four CDMA telcos would be impacted if the government implements the extended GSM concept. Not only will we need to vacate the specific frequency band, leading to service disruption, we will also have no scope for future growth left."

As of now, there are four big CDMA players: Tata Teleservices, Reliance Communications, MTNL/BSNL and HFCL (in some circles).

Th official also said all the GSM players are vying to get as close as possible to the 900 MHz band, since many incumbent GSM telcos will lose 900 MHz spectrum they already hold by early next year due to 'refarming'.

For now, the ball is in the government's court though. It remains to be seen if the government will put fiscal considerations before telcos' plight and go ahead with re-auction of 800 MHz spectrum band by allowing GSM guys to bid for 880-900 MHz frequencies. Alternatively, it could look at substantially lowering the reserve price for 800 MHz band which may encourage CDMA players to bid in any fresh auction.

by Sindhu Bhattacharya

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