Telcos should tank-up spectrum; next sale may take long: DoT

A day before India’s biggest spectrum auction begins, the government on Friday said telecom firms should “tank up” radiowaves to bridge shortfall in their holdings as the next such sale may not happen for “quite some time”.

“After this auction we believe, there will be no spectrum shortage in India. This problem of spectrum scarcity affecting quality of service will be history,” Telecom Secretary J S Deepak told PTI.

Terming the auctions as a “great opportunity to tank up on spectrum”, he said not doing so will place operators at a competitive disadvantage vis-a-vis others. The same opportunity in terms of the variety of spectrum that is being placed on the block will not come for quite some time, he added.

“After this auction if there is unsold spectrum, it means there is no demand for it... So we will harmonise spectrum purchased by operators in all bands, including 1,800 Mhz and 2,100 Mhz, so that we can make it contiguous and multiply its efficiency for operators. Only after the harmonisation process is complete, will we think of the next auction,” Deepak said.

India’s biggest telecom players Bharti Airtel, Vodafone, Idea Cellular and new entrant Reliance Jio Infocomm are amongst the seven companies in fray for the bidding. Other bidders include Reliance Communications, Aircel and Tata Teleservices.

As much as 2,354.55 Mhz of frequencies are being put up for auction in seven bands — 700 Mhz, 800 Mhz, 900 Mhz, 1,800 Mhz, 2,100 Mhz, 2,300 Mhz and 2,500 MHz. The radiowaves being put up for auction can be used for 2G, 3G and high speed 4G mobile services. This is more than the cumulative spectrum holding of the top four operators.

On the high cost of spectrum, Deepak said the industry “absolutely” has the paying capacity for buying it in the auction which starts at 10 AM on Saturday.

This is the first time radiowaves in 700 Mhz band will be put up for auction and it is priced at Rs 4 lakh crore at the reserve price. However, the operators and analysts have said that the pricing in this band is too high.

On pricing of 700 MHz, the Telecom Secretary said that since the spectrum in the band is top quality, it is expensive.

The price is high but it has its own advantage both in terms of propagation ability of spectrum and potential savings in capital expenditure, he added.

“It is best for 4G, for indoor coverage, so it has its value. Those buying 700 Mhz spectrum have to spend a third of the amount on capex as compared to 3G spectrum in 2100 Mhz band,” he said.