Telcos divided on delinking spectrum, licence issues

Airtel, Vodafone-Essar favour delinking; Reliance, Tata oppose.

The issue of delinking spectrum allocation from the licence to provide telecom services, raised by the sector regulator in its recent consultation paper, has divided the industry. Bharti Airtel and Vodafone-Essar are in favour of delinking spectrum from the unified access service license (UASL), while Reliance Communications and Tata Teleservices have taken a contrary view.

Bharti Airtel has said the UAS licences issued in future should not carry with them any eligibility for start–up spectrum. The licencee should have to go to the market even for start–up spectrum, it said in its comments on the Telecom Regulatory Authority of India’s consultation paper on ‘Overall spectrum management and review of license terms and conditions’.

However, Reliance Communications says the contractual spectrum in 800, 900 and 1800 MHz bands cannot be delinked from the existing UAS licence. “Due to unavailability of spectrum in 800, 900 and 1800 MHZ bands, it would not be desirable to issue a new licence with the linked spectrum in these bands without ensuring all licencees will get contracted spectrum,” RCom said in its comments.

Vodafone Essar, however favours delinking of spectrum from the UASL. “This would bring India in line with international best practice, and this is a fundamental requirement for moving to a market-based regime for spectrum allocation and trading, as has been recommended earlier by Trai,” the company said. The key priority is to look out for a workable mechanism to price spectrum at market prices, as this would ensure spectrum finds its way to operators who can deliver the highest economic value with it, the company added in its comments.

On the contrary, Tata Teleservices’ response to Trai said spectrum is the key resource for offering wireless/mobile services. Therefore, there is no logic of obtaining an UASL without spectrum. Spectrum should not be delinked from the UASL and the licencee should be upfront allocated the contracted amount of spectrum, i.e 2x5 MHz for CDMA technology and 2x6.2 MHz for GSM technology, by paying the cost.

On the other issue of audit of spectrum, the players again have a divergent view. While Bharti and Vodafone feel there is no need of spectrum audit, RCom and Tata are in favour of it, to ensure service providers have been using spectrum efficiently and without hoarding.

Trai had floated the consultation paper on overall spectrum management and review of licensing conditions in October. The regulator is expected to come out with its recommendations on the issue soon.