New spectrum pill for data scarcity

Harmonisation releases 200 MHz spectrum worth Rs 30,000 crore

India’s dubious distinction of being a telecom spectrum-starved country could soon be a thing of the past.  

The government has created several highways and divided these smartly between the communications sector and the defence band through harmonisation of air waves in the 1,800-MHz band, most efficient for 4G services. This would be a breather for the telecom sector, hamstrung not only by poor availability, but also fragmented blocks of spectrum (air waves), which are not efficient to transmit high-speed data.

An estimated 200 MHz of spectrum is being made available additionally through harmonisation. This is as large as almost 90 per cent of the entire spectrum that would be auctioned later in the year.  

With the Department of Telecom (DoT) having nearly completed the process of spectrum harmonisation, both quantity and quality of airwaves will no longer be a concern, as 200 MHz of additional spectrum has been released through this process for the coming auctions.

Additionally, the process of consolidating spectrum holdings in the data-efficient band of 1,800 MHz will help the exchequer earn an additional Rs 30,000 crore at base prices.

This spectrum will be in addition to the Rs 5.44 lakh crore worth of spectrum auction the Union Cabinet approved last week.

While the process has been underway for several years now, J S Deepak, secretary, DoT, managed to get it done in merely 100 days. The last leg will be completed by the first week of July.

By consolidating fragmented spectrum into contiguous blocks, wastage has been eliminated. Deepak said, “The days of India being a spectrum-starved country are over. For long, the industry has suffered from fragmented spectrum holdings, which has also affected efficiency. But with harmonisation, this too shall be a thing of the past as they will be able to bid for large contiguous blocks in the 1,800-MHz band.”

ROAD TO SUFFICIENCY
Historically, the 1,800-MHz band has been used by defence

• 2009: DoT wanted additional spectrum to be released by defence for 2G and 3G and signed a MoU in 2009. DoT would get spectrum in return for providing optic fibre cable network to defence. The MoU did not materialise
• 2010: Defence released spectrum for 3G
• 2011: At a meeting of the defence and telecom ministers it was decided that the 1,700-2,000-MHz band would be equally divided between the armed forces and DoT in chunks of 150 MHz each
• 2012: Supreme Court cancelled 2G licences and this spectrum came up for bidding in 1,800-MHz block. Spectrum came in fragmented blocks and saw little bidding by operators
• 2014: When Metro licences expired, 1,800-MHz spectrum was put up for auctions. Little fresh spectrum came up in the 1,800-MHz band
• 2015: Harmonisation process got a push
• 2016: Harmonisation starts; by end June it is on course to for completion

In the last big auction of 2014, 385 MHz was auctioned in the 1,800-MHz band, of which only 235 MHz was usable for LTE (long-term evolution). In many circles, only partial spectrum was available as government agencies were using it in parts.

In 2016, of the 220 MHz chunk made available, 165 MHz can be used for LTE services, which means that more operators will bid for the spectrum in this band.

Commenting on the process, Gopal Vittal, chief executive officer (India and South Asia), Airtel, said, “The need for harmonisation has been a long-standing one… DoT has made it a reality in 100 days.”

He also said Digital India and the government’s strategy would lead to better penetration of broadband services as more spectrum will now be available for 4G services .  

In the new scheme of things, defence has moved to one large block of 20 MHz, so that it does not interfere with the telecom sector’s spectrum. This was the case till recently in Rajasthan and Punjab where operators could not offer LTE in many cities, despite having the spectrum, as it was being used by government agencies.

Also, guard bands between different operators and defence have been eliminated, which has released additional spectrum that can be auctioned. The exercise was massive, as it required telcos and defence to work in tandem to exchange frequencies on live networks, which were delivering voice and data.

Sunil Sood, chief executive officer, Vodafone India, said: “This progressive step maximises efficiency. As consumer demand evolves from voice to data, harmonisation will provide customers with high speed, high capacity and superior network experience.”  With data emerging as the new growth driver of the sector, getting adequate quantity and quality of spectrum (in blocks of 5 MHz) was imperative. And for this, the 1,800 MHz band is most efficient but the government has never had sufficient spectrum in large contiguous blocks that could be put up for sale.

In the coming auctions, operators will be able to acquire spectrum in circles where they have partial spectrum and improve coverage. In many states, operators had bought spectrum not realising that defence was using it and in many others they could only buy it partially as spectrum was not available. Also, the importance of offering spectrum in continuous (contiguous) blocks of 5 MHz will help lower capital costs and the carbon footprint of the sector.

Airtel’s Vittal said, “By offering contiguous blocks of spectrum, both capital and operational costs along with carbon footprint will be lower as single RAN (radio access network) technology can be deployed.”   However, this exercise needs to be an ongoing one as and when spectrum of different players expires and comes up for fresh bidding.

Vodafone’s Sood said: “Harmonisation in a planned manner should be done periodically. As the tenure of administered spectrum expires, it will be put up for auction. Spectrum sharing, trading and M&A (mergers and acquisitions) necessitates the need in the future.”