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Telecom operators are likely to get enough spectrum across bands through the auctions the government will conduct in 2014-15, according to the schedule prepared by the wireless planning and coordination wing of the department of telecommunications (DoT).
There will be 184 MHz of spectrum in the 900 MHz band available for auction, as 29 licences will be due for renewal in 18 telecom zones in 2015-16 and 104 MHz airwaves will be available for auction.
In the 2100 MHz band, primarily used for third generation (3G) services, DoT expects the defence ministry to release 5 MHz of spectrum in 2014-15. But the timing of the auction will depend on when the defence ministry releases the spectrum. They’d earlier vacated 20 MHz, based on a memorandum of understanding signed with DoT.
According to the report on the schedule for future auctions, the government has 20 MHz of spectrum available in 19 of the total of 22 telecom circles in India that would be auctioned. In 2010, the government had auctioned 2300 MHz spectrum to the Broadband Wireless Access licence holders such as Reliance Jio Infocomm, Bharti Airtel and Tikona for long-term evolution (LTE) services. However, spectrum is no longer linked to licences and is not bound to technology. Spectrum acquired through auctions in any band can be used for any technology.
According to the report, the government also has 40 MHz in the 2500 MHz band, globally used for LTE or fourth generation (4G) services, in eight service areas and 20 MHz in the remaining 14 telecom circles.
The schedule note did not mention plans for auction of the 700 MHz band.
Meanwhile, DoT is also looking at possibilities of swapping 15 MHz of spectrum in the 1900 MHz band with the 2100 MHz band, as suggested by the Cellular Operators Association of India. The latter had earlier suggested that 15 MHz of spectrum in the 1900 MHz band identified for EVDO (evolution data optimised) services be swapped with a similar amount of spectrum in 2100 MHz. Spectrum in the latter band is with the defence ministry, which is examinng the matter, the report said.
However, even if the defence ministry agrees, the government would need to discuss the matter with Sistema Shyam Teleservices, which solely operates CDMA technology on the 800 MHz band as there would not be any growth path left for CDMA operators, added the report.
The note added the Telecom Regulatory Authority of India (Trai) had given its recommendations on the reserve price of 800 MHz spectrum to be auctioned. The recommendations have also been reviewed by a DoT committee and its report would be placed before the Telecom Commission, the highest decision making authority within DoT.
Trai has recommended a reserve price of 800 MHz spectrum at Rs 2,685 crore for 1 MHz of pan-Indian airwaves. The price is 48 per cent higher than the base price for the previous auction of the band, in March 2013. But it has kept the base price at 80 per cent of the average valuation.
Sistema Shyam, lone bidder in the March auction and which had acquired radiowaves to operate in eight circles for Rs 3,639 crore, had repeatedly said the reserve price should be kept much lower than the 900 MHz and 1800 MHz bands.
The government will have to conduct the auction within a year, as 900 MHz band licences in these service areas come for renewal in 2015 and 2016. A few licences in the 1800 MHz band are also due for renewal in this period.
Operators who will have to renew their licences together hold 172 MHz in the 900 MHz band and about 26 MHz in the 1800 MHz band. In February 2014, DoT had auctioned 385.2 MHz of spectrum in the 1800 MHz band, of which 307.2 MHz were sold. It had sold all spectrum in the 900 MHz band in the Mumbai, Delhi and Kolkata circles in the February auction.
Besides incumbent operators needing to renew licences, telecom operators have been constantly looking to increase their spectrum holding in each circle, to boost their potentially remunerative high-speed data services. While Bharti Airtel and Idea Cellular would try to retain spectrum in the circles where their licences are expiring in the 900 MHz band, they are likely to pick up spectrum in the 1800 MHz band in all those circles. All the incumbent players did the same thing in the previous auction, in February this year.
DoT has asked Trai for its recommendations on valuation and pricing of spectrum in all the circles where it would have to conduct auctions. There are 29 licences that would expire across 18 circles in 2015-16.
The government, in its interim Budget in February, had said it aimed to generate revenue of Rs 38,954 crore from communication services during 2014-15. This includes receipts from spectrum sale, licence fees and one-time spectrum charges. The Government got Rs 61,162 crore in the auction of February this year. Of this, it was to get Rs 18,296 crore during the financial year ended March, about 61 per cent higher than the Budget target of Rs 11,343 crore.
