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October 18, 2012

Industry Concerned about India's Costly Proposal to Reallocate 900 Mhz Band Airwaves

By Ed Silverstein, TMCnet Contributor

The telecom industry is voicing concerns about India's proposal that carriers lose  900 Mhz band airwaves – which will mean the private sector will have to spend some additional $24 billion, according to news reports.

As of early this week, the reallocation proposal from the Telecom Commission still needs to be approved by government ministers before it goes into effect.

The proposal was to be particularly costly for Bharti Airtel Ltd, BSNL and Vodafone (News - Alert). These and other companies would have to use the less-desirable 1800 Mhz band airwaves in 2014 – if the proposal is enacted.

The move from the 900 Mhz band to the 1800 Mhz band would lead to the operators doubling infrastructure.

The proposal would mean the carriers could buy back the spectrum. Or they could pay for replacement airwaves, construct new towers and replace gears.

Billions of dollars of equipment now held by the carriers would become “obsolete,” if the proposal goes through, according to data from the Cellular Operators Association of India (COAI).

It will also lead to higher costs for consumers. "We have recommended that full re-farming of the entire 900 MHz band of spectrum should be adopted,” inter-ministerial panel Chairman R. Chandrashekhar stated. “We will refer this to the Empowered Group of Ministers (EGoM). The issue would be discussed at the EGoM meeting… The EGoM will take the final decision on this."

The Department of Telecom wants the 900 Mhz band available to all players who are interested.

The COAI has stated that the proposal would be the “death knell for the industry that has been going through rough times due to harsh, unreasonable and irrational decisions of the government on spectrum reserve price, spectrum usage charge and one-time license fee,” according to the Economic Times of India.

"The spectrum refarming is tantamount to forcible dislodgment of a legitimate occupant and goes against license terms and conditions. Networks are designed around frequency bands, not the other way round! There is no precedence in the world, where any telecom network, let alone some of the world's biggest telecom networks, has had its frequency band uprooted.”

It was reported on Thursday that India Telecom Minister Kapil Sibal said ministers chose to defer a decision on spectrum refarming because "there wasn't enough time" during their meeting, the Business Standard said. The panel was scheduled to announce a decision on Thursday.

Edited by Brooke Neuman
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