Telcos knock PMO door seeking a solution for spectrum crunch

In a letter to Nripendra Misra, COAI stresses that regulatory certainty and protection of existing investments are essential for attracting future investments

Failing to convince the Department of Telecommunications (DoT), telecom operators have now decided to knock the doors at the Prime Minister's Office hoping to reach a amicable solution for the stressed industry that has been asking the Government to free up additional spectrum at a reasonable cost for commercial use.

On Tuesday, the Cellular Operators Association of India (COAI), which lobbies for the GSM cellular operators in India, has written a letter to Nripendra Misra, principal secretary to the Prime Minister Narendra Modi seeking intervention of the former chief of the Telecom regulatory Authority of India (Trai), adding that the industry requires the government's enabling support for crafting a viable and sustainable industry structure.

"For this, a predictable and stable regulatory and policy environment that ensures an investor-friendly climate, protection of existing investments, service continuity, availability of adequate, appropriate and contiguous spectrum would be a prerequisite," Rajan Mathews, director general of COAI, has said in his letter to Misra.

Noting that the government's digital agenda will require huge investments, the letter added that regulatory certainty and protection of existing investments are essential for attracting future investments.

"These investments will not be made, if existing investments are put at risk and the return on investment is put in jeopardy. For instance, if the proposed spectrum auction (to be held in February 2015) is conducted with completely inadequate spectrum, it will put investments of thousands of crores and continuity of services to millions of customers at huge risk," Mathews said in the letter.

The letter also stated an unprecedented auction design, where the spectrum being put to auction is almost entirely held by existing licensees, with hardly any fallback spectrum in other bands, is a fundamentally flawed mechanism and is most likely to lead to irrational and totally unrealistic pricing or a significant write off of existing investments by incumbents.

According to COAI, the upcoming auction will entail 1,800MHz band (20 circles) and 900MHz band (18 circles) and the recommendations said spectrum should be put to auction in a block size of 2x200 KHz in both the 900 and 1,800 MHz bands. "It is requested that the auction should not be conducted till the adequate spectrum, as recommended by Trai, is made available. We, therefore, suggest that as a first priority, additional spectrum should be made available on an urgent basis in 800MHz, 900MHz, 1,800MHz and 2,100MHz bands as these bands are the most harmonized spectrum bands internationally," the letter added.

It also said that the Government should consider the recommendations of Trai and mandate the surrender of all spectrum held by state-owned MTNL and all but one carrier held by BSNL. According to COAI, this would ensure the availability of spectrum as extended GSM band would add on to the availability in 900MHz band by 5-10MHz in each circle.