COAI expresses spectrum crunch concern to PMO

The Cellular Operators' Association of India (COAI) Tuesday wrote to the Prime Minister's Office (PMO) expressing concern over spectrum crunch and seeking more spectrum for fair auctions due February 2015.

The letter to Nripendra Misra, principal secretary to the prime minister, a copy of which is available with IANS, said the industry requires the government's enabling support for crafting a viable and sustainable industry structure.

"For this, a predictable and stable regulatory and policy environment that ensures an investor-friendly climate, protection of existing investments, service continuity, availability of adequate, appropriate and contiguous spectrum would be a prerequisite," it said.

Stating that the government's digital agenda will require huge investments, the letter said regulatory certainty and protection of existing investments are essential for attracting future investments.

"These investments will not be made, if existing investments (to the extent of thousands of crores) are put at risk and the return on investment is put in jeopardy. For instance, if the proposed spectrum auction (to be held in February 2015) is conducted with completely inadequate spectrum, it will put investments of thousands of crores and continuity of services to millions of customers at huge risk."

The COAI letter said an unprecedented auction design, where the spectrum being put to auction is almost entirely held by existing licensees (with hardly any fallback spectrum in other bands), is a fundamentally flawed mechanism and is most likely to lead to irrational and totally unrealistic pricing or a significant write off of existing investments by incumbents.

In the auction that is going to start in February, in 1,800 MHz band, 20 circles are going for auction, while in the 900 MHz band 18 circles will be up for sale.The recommendations said spectrum should be put to auction in a block size of 2x200 KHz in both the 900 and 1,800 MHz bands.

"It is requested that the auction should not be conducted till the adequate spectrum, as recommended by TRAI (Telcom Regulatory Authority of India), is made available. We, therefore, suggest that as a first priority, additional spectrum should be made available on an urgent basis in 800 MHz, 900 MHz, 1800 MHz and 2100MHz bands as these bands are the most harmonized spectrum bands internationally," the letter stated.