Spectrum refarming could hit defence hurdle

The government will get about Rs 50,000 cr ($8 bn) by auctioning 2.1GHz band of spectrum

The government’s plan to refarm spectrum in the 900 MHz band, which can be used for third generation or 3G higher technology services, is unlikely to have a smooth sailing as the ministry of defence is not in favour.

According to a recent discussion of an inter-ministerial committee, the ministry has noted that for refarming, the ministry of communication (MoC) might ask it to vacate 40 MHz of spectrum in the defence band 2G spectrum. And, the wireless advisor has said if the proposal is adopted, the MoC will restrict the commercial use of 110 MHz (55+55 MHz) in the 1800 MHz band. The advisor added that though the Telecom Regulatory Authority of India (Trai) had recommended refarming of the 900 MHz band, there were no plans to immediately adopt it.

In its latest recommendation, Trai has suggested full refarming, and the Telecom Commission has sought some clarifications. In 2010, Trai had recommended refarming of the 900 MHz band as part of three options. The Cabinet has already allowed refarming as part of the new telecom policy.

According to the discussion, MoC should not plan any auction up to 110 MHz (55+55) as proposed in the Trai recommendation, as it would seriously impact operations of defence equipment. MoC should restrict the coming auction upto 20 MHz of spectrum in the 1800 MHz band vacated by the defence ministry, it added.

The defence ministry is also studying the proposal of swapping 15 MHz of spectrum in the 1,900 MHz of spectrum, currently earmarked for the growth of evolution video and data only services, with a similar quantity of 2.1 GHz spectrum is currently with defence, on a priority basis. This was actually proposed by the Cellular Operators Association of India, which lobbies for incumbent GSM operators like Bharti Airtel, Vodafone India and Idea Cellular.

On the basis of this proposal, the department of economic affairs has estimated the swap deal is likely to add Rs 50,000 crore ($ 8 billion) to the government exchequer, as the government will have 40 MHz (2x20MHz) of additional spectrum which can be auctioned for commercial use.

According to the discussion, the defence ministry is also not agreeable to the proposed extended GSM band that would take spectrum from the existing 800 MHz CDMA band. It will infringe into the defence band by 10 MHz in the 915-935 MHz sub-band. However, as they have running usages in the sub-band, the wireless advisor has informed the defence ministry that the department of telecom will offer an alternative 10 MHz spectrum if the government accepts the proposal for the extended GSM band. The matter is currently under consultation, and DoT is yet to take a call.

The defence ministry is also examining the release of 5 MHz of 3G spectrum in the 1700-2000 MHz band, as agreed earlier, on a priority basis.

The government also hopes to get Rs 25,000 crore from the coming auctions of 1800 MHz and 900 MHz spectrum bands, based on the reserve price recommended by Trai.