Spectrum reframing issue will be placed before EGoM: Sibal

Airtel, Vodafone and Idea Cellular have opposed spectrum refarming as they will need to vacate 900 Mhz frequency band

The issue of spectrum refarming which may lead to telecom operators like Airtel, Vodafone, Idea Cellular bearing high costs will be placed before the next meeting of Empowered Group of Ministers.

According to a study, the change in frequency for transmitting mobile signals could cost the telcos over Rs one lakh crore cumulatively.

"The matter is going to EGoM. The EGoM is slated to meet very soon. In fact we were to meet last week. EGoM could not meet due to several reasons...I can't disclose them," Law and Telecom Minister Kapil Sibal told PTI in an interview.

Telecom operators mainly Airtel, Vodafone and Idea Cellular have opposed spectrum refarming as they will need to vacate 900 megahertz frequency band, in which cost of providing service is less compared to other frequency bands, or pay high price for continuing services in the band.

Government has asked telecom operators to move to 2G frequency band of 1800 Mhz band to continue services after their licence terms is over. Airtel, Vodafone and Loop Mobile are among first lot of players whose licence in couple of circles will expire in 2014. As per present norms they will have to secure airwaves by participating in auction.

"We are now going to proceed with further auctions, both of the 900 Mhz and 1800 Mhz band. That should happen very soon," Sibal said.

Sector regulator TRAI has recommended fixing reserve price which is around 2 times higher for 900 Mhz band compared to 1800 Mhz.

Planning Commission Deputy Chairman Montek Singh Ahluwalia had written to Sibal in April for referring the matter back to TRAI for new reserve price. The telecom Ministry is yet to send the matter to the regulator.

A study by market analyst and research firm Analysys Mason said after moving to 1800 MHz, operators using 900 Mhz spectrum would need to replace 2.86 lakh base stations and install an additional 1.71 towers to provide equivalent coverage.

The study says operators will require an incremental capex of Rs 54,739 crore and incremental annual operating expenditure of Rs 11,762 crore when they shift from 900 Mhz band to 1800 Mhz band.

An additional capex of about Rs 26,653 crore would be required to deploy new towers to support the incremental base stations, it added.

Telecom operators Airtel, Vodafone and Idea Cellular have said if they move to 1800 Mhz, they would have to write off existing 900 Mhz assets estimated at Rs 22,310 crore.