EGoM meets today on telecom spectrum refarming

The meeting to decide whether incumbent telecom operators Bharti Airtel, Vodafone, Idea Cellular, BSNL and MTNL would have pay a combined Rs 100,000-plus crore or get a major relief due to refarming of spectrum in the 900-MHz band is scheduled tomorrow.

The Empowered Group of Ministers (EGoM) on telecom, headed by Finance Minister P Chidambaram will meet to take a final decision on refarming of the 900 to 1,800 MHz spectrum.

The Telecom Commission (TC) on Wednesday had a five-hour meeting to discuss the recommendations made by an internal committee. This panel was set up to look into the clarifications sought by the EGoM from the Telecom Regulatory Authoritiy of India (Trai) on its earlier recommendations as to how much spectrum should to refarmed. Trai’s clarifications came yesterday.

While the TC had, in its earlier meeting, recommended all the 900-MHz spectrum be refarmed, top sources in the government say the EGoM tomorrow might also consider an alternative proposal, to permit retention of up to 2.5 MHz to all operators which had taken the 900 MHz band.

If the EGoM decides for refarming the entire 900 MHz band, incumbent operators would have to fork out a little over Rs 1.15 lakh crore to migrate their 900 MHz network and subscribers to the 1,800 MHz band, according to an analysis by Analysys Mason on behalf of the Cellular Operators Association of India.

However, allowing them to retain up to 2.5 MHz would reduce the outgo by about half, providing a huge relief to incumbents. However, it could further impact the already muted response to the 2G spectrum auction, for if they are allowed to retain half the spectrum, they would not bid aggressively for more. This could have serious implications on the government's target of getting Rs 40,000 crore this financial year from the auction and one-time fee.

Trai had in 2010, recommended refarming the 900 MHz band, saying it was used for third generation (3G) services globally and was a valuable band that should not be used uneconomically to give 2G services. The Union cabinet has already permitted refarming as part of the telecom policy.

The TC had looked at alternatives earlier — not refarming at all, allowing operators to retain 2.5 MHz of spectrum or, finally, to refarm all the spectrum they have.