DoT willing to give 5 MHz from premium band to Railways, but for a price

Dept wants Railways to use the airwaves for non-commercial purpose and meet its remaining needs through the delicensed spectrum

The Department of Telecommunications has agreed to give 5 MHz from the premium 700 MHz band to Indian Railways for signaling purposes. The department wants the Railways to use these airwaves for non-commercial purposes and meet its remaining requirement through the delicensed spectrum.

In its response to the Cabinet note by the Ministry of Railways, DOT said 5MHz spectrum of the 700 MHz spectrum band can be given to the Railways at a price decided by the Ministry of Finance.

“We have said that we have no objection in the finance ministry fixing the price for railways as the money will eventually go to the consolidated fund of India,” an official told Business Standard.

The airwaves are estimated to cost Rs 65,000 crore and are considered premium spectrum for its indoor penetration and for long-distance mobile communications as they require less number of mobile towers to provide services compared to 3G and 4G services.

However, the department did not relent to the railway demand for higher quantum of the spectrum. Instead it advised the national carrier to meet its remaining demand for spectrum through delicensed spectrum, which is essentially available for anyone.

The government is also of the view that the frequency band is earmarked for mobile services and allocating it to the Railways for non-commercial use may adversely impact levies like adjusted gross revenue, spectrum usage charges and licence fee.

“Signaling is one of the sensitive areas for spectrum utilization by the railways, which can be done with the 700 MHz spectrum band and the remaining through the delicensed airwaves. That way it would be a win-win for both railways and our department,” the official quoted above said.

Railways had asked for 10MHz of spectrum, to begin with, for setting up a public safety and security service.

In August 2018, the Telecom Regulatory Authority of India (TRAI) proposed a 42 per cent reduction in the price of 700 MHz Rs 6,568 crore per MHz. It implied that the total value of airwaves would be Rs 65,680 crore at the reserve price.

The same 700 MHz band spectrum remained unsold in the 2016 auctions when TRAI had fixed a base price of Rs 11,485 crore per MHz.

In August 2019, while announcing its recommendations for the spectrum auctions, TRAI stuck to its previous suggestion on the pricing of the 700 MHz airwaves. It also said that railways be given 5MHz of the 700 MHz spectrum initially and later the allocation can be reviewed.

DOT in its response to the Cabinet note cited the regulator’s suggestion for the same.

It is learnt that the Ministry of Railways will soon finalise the proposal and seek approval from the Cabinet.