In what is being dubbed as a serious jolt to the major telecom operators such as Bharti Airtel, Vodafone and Idea Cellular, the Telecom Commission has recommended all spectrum allocated to operators in the 900-MHz band would be replaced with the 1,800-MHz band at the time of renewal of their licenses.
Announcing the recommendation, DoT (department of telecommunications) secretary R Chandrashekhar said, “We have recommended that full refarming of the entire 900-MHz band of spectrum should be adopted. We will refer this to the EGoM, which will take the final decision on this.”
The commission in its meeting had taken up three alternative proposals - one that included retention of up to 5 MHz of spectrum, retention of up to 2.5 MHz and refarming of the entire spectrum.
If the recommendation is approved by the Empowered Group of Ministers (EGoM) on telecom, the operators may suffer a blow of over Rs. 1.15 lakh crore to switch their 900-MHz network and subscribers to the 1,800-MHz band.
The decision is believed to have an adverse impact on consumers as well, who may have to shell out additional 60p per minute as the operators are expected to pass on the costs to them. Right now, the average tariff a minute is about Re. 1 per minute.
The GSM operators associations Cellular Operators Association Of India (COAI) has strongly criticised the move. “Spectrum refarming in 900 MHz band is against consumer, industry as well as the national interest and one that is discriminatory for the GSM industry,” the Cellular Operators Association of India (COAI), the primary lobby group of the GSM operators, said in a release on Wednesday.
The statement also said the move was “tantamount to forcible dislodgment of a legitimate occupant and goes against licence terms and conditions. Networks are designed around frequency bands, not the other way round”.
The affected operators are expected to the move the court against the commission's recommendation.
In 2012, the telecom regulator TRAI had recommended 'refarming' of the 900-MHz band, as the spectrum was globally used for 3G services and had said the band shouldn't be used for giving 2G services. The Cabinet has already given its nod to the refarming as part of the new telecom policy.
According to reports, the government is going to keep a different reserve price for the 900MHz spectrum auction than what the TRAI had recommended earlier. The 900MHz spectrum is believed to more efficient band, which enables operators to provide more coverage using lesser towers.