Auction for 700 MHz spectrum likely soon

Details, timing being discussed; Trai might be asked to suggest a reserve price, too

Cellular telecom operators might soon get an option to acquire spectrum in the 700 MHz band, considered one of the most efficient ones in worldwide use.

The department of telecommunications (DoT) is currently discussing details of an auction of the 700 MHz band, said a top official. Details of technology, process of allocation, availability, and tentative schedule are being decided.

It might, though, need to get recommendations on a reserve price from the Telecom Regulatory Authority of India (Trai). Last month, Trai chairman Rahul Khullar had told Business Standard auction of the 700 MHz band was unlikely before 2015-16, as the government had yet to decide which technology should be adopted for 700 MHz airwaves.

At present, many countries such as the US, Australia and in Latin America are either using or are setting up long-term evolution (LTE) networks on 700 MHz spectrum. There are a little more than 280 devices available that can be used for 4G (fourth generation) or LTE services on this spectrum.

The government has about 100 MHz of spectrum available in the 700 MHz band that can be auctioned. It was earlier looking at offering up to 10 MHz in each circle, in eight blocks, with no restriction for operators on the number of blocks they want to bid. It’s likely 2x45 MHz would be auctioned, while 10 MHz would be kept in between as a guard band.

Earlier, Trai had recommended that spectrum in the 700 MHz band be priced at four times the 1,800 MHz base price. Considering the price of 1800 MHz spectrum in the February auction, the base price for 1 MHz of pan-India spectrum in the 700 MHz band would be about Rs 9,000 crore, and a little more than Rs 45,000 crore for 5 MHz of pan-India spectrum.

The limit for operators’ spectrum acquisition in this band would be 50 per cent of that assigned in their respective circles and 25 per cent of the total spectrum assigned in all bands in all service areas put together. As part of the plan, a large part of the 700 MHz spectrum, used by analog and digital broadcasting services, will be shifted to a new band.

Earlier, the industry asked the government to give the option to switch 2,300 MHz band spectrum with the 700 MHz band for LTE or 4G services. While this has been discussed, the plan seems to be on the backburner.

If the swap option was permitted, broadband wireless access (BWA) spectrum holders such as Reliance Jio, Bharti Airtel and Tikona Digital would have been benefited.

According to experts, the 700 MHz band requires only about half the number of towers for offering the same quality of service as 2,300 MHz spectrum, at a much lower capital investment for rollout.