Telecom lobbies spar over spectrum

The proposed re-allocation of spectrum likely to be discussed in EGoM meet today

Two telecom operators' associations are at loggerheads over the proposed re-farming (re-allocation) of 900 MHz spectrum, expected to be discussed in the meeting of the Empowered Group of Ministers (EGoM) on telecom on Wednesday. Association of Unified Telecom Service Providers of India (AUSPI) supports re-farming, while the Cellular Operators Association of India (COAI) is dead against it.

On Monday, AUSPI wrote to Finance Minister P Chidambaram, who heads the EGoM on telecom, that re-farming is legally tenable and the government should not be swayed by COAI's "deliberate and disingenuous campaign of misinformation on the costs" associated with re-farming.

AUSPI's letter comes in the wake of COAI's representations before the Telecom Commission and the EGoM demanding the proposal for re-farming should be referred back to the Telecom Regulatory Authority of India (Trai).

Following AUSPI's letter to Chidambaram, COAI is again planning to write to the Telecom Commission and EGoM on Wednesday. "We are discussing with our members. We will write to the Telecom Commission and the EGoM as we need to point out that AUSPI has given a lot of misinformation," said Rajan Mathew, director-general, COAI.

In his letter to Chidambaram, AUSPI secretary-general Ashok Sud stated: "The true costs are substantially lowered, and highly inflated and exaggerated figures provided by COAI should not deter the government from going ahead with re-farming."

Earlier, COAI had informed the Department of Telecommunications (DoT) that re-farming of 900MHz would cost the incumbent operators about Rs 1.25 lakh crore in incremental capex and Rs 25,000 crore in equipment write-off. However, AUSPI has noted the figure would be much lower at about Rs 73,000 crore.

Mathew questioned AUSPI's stand. "The figures we quoted are based on a study by Analysys Mason. That was not just a number. AUSPI can't say that it is baseless."

According to Sud's letter, re-farming is legally tenable as the government has given ample time, identified alternate spectrum in 1,800 MHz and also reserved enough quantum for allocation. "The process has begun and should continue. We unequivocally support the government's decision to implement the re-farming process and look forward to further directions in this regard."

The government has every right to renew licence according to revised terms and conditions after the expiry of the current period of validity of the licence, Sud added.

"We would like to highlight that re-farming of the 900MHz band is absolutely essential for the country's broadband penetration goals to be met. Re-farming will be an important milestone in the development of the telecom sector as 900MHz spectrum band is cost-effective and efficient, and post re-farming, it can be used more effectively for next generation wireless technology," Sud's letter noted.

To this, Mathew shot back: "The 800MHz spectrum, which is used by the CDMA players (AUSPI members) is more efficient. Then why should 800MHz not be re-farmed?"

Globally, re-farming is done to take back spectrum from the operators who don't use the airwave, and not from the ones who are using it, Mathew added.

"In India, re-farming is well debated, thoroughly analysed, duly considered by Trai, approved by the Telecom Commission and endorsed by the government. And that too, well in advance of the expiry of the validity of first batch of licences coming up for renewal in late 2014," Sud pointed out in the letter.

Operating permits of incumbent telcos, including Bharti Airtel and Vodafone, are expiring in Delhi, Mumbai and Kolkata service areas in November 2014.

"As we have said earlier, the re-farming issue should be referred back to Trai for fresh recommendations. Trai had also said that the issue of re-farming needs more consultation" said Mathew.

In 2010, Trai had recommended re-farming of the 900-MHz band. The Cabinet has already allowed re-farming as part of the new telecom policy.