Indian Telcos Want More 3G Spectrum in 2015 Auction, Reliance Jio Opposes A-Vo-Id Lobby

TRAI Open House Spectrum AuctionIn the TRAI open house discussion on “Spectrum valuation for licenses expiring in 2015 and 2016“, there was a consensus among all telecom stakeholders that the amount of spectrum put for auction is inadequate. TRAI has already indicated that more spectrum should be made available. All telcos made recorded statements that more spectrum should be made available in the 900MHz and 2100MHz bands for the 2015 auctions [Both the Bands are suitable for deployment of 3G Wireless Broadband] DoT has also written to the government on scarcity of spectrum for mobile broadband services and indicated that more spectrum should be made available. All the stakeholders are pro more spectrum and will coerce the government to make more spectrum available. Right from Day One when Consultation began for Spectrum Auction I’ve been telling the DoT/ TRAI to come out with a clear Roadmap on Spectrum, but what else could have been expected from the Corrupt Governance of the Congress led Government ?

TRAI Chairman, Rahul Khullar made a compelling remark on the upcoming spectrum auctions

the government goes laughing to the bank and the sector goes down drain.

This clearly indicates the regulator’s concern on paucity of spectrum that could result in a mad scramble for spectrum resulting in soaring of spectrum prices and increased sectoral inefficiency.

Mr. Khullar touched upon an important issue: minimum and maximum amount of spectrum to be allowed for bidding. Both scenarios have benefits and will result in some operators losing out. Capping of amount of spectrum per operator could result in increased participation & better pricing while resulting in inefficient spectrum usage while keeping a high floor of spectrum to be acquired could result in spectrum efficiency but lower participation.

Airtel, Vodafone and Idea [A-Vo-Id] Lobby Vs Reliance Jio Infocomm
With expiry of licenses, A-Vo-Id Operators will be treated as new operators in the corresponding circles. As per existing auction rules new operators will have to bid for minimum 5MHz blocks. This presents business continuity challenges for operators as spectrum is scarce in most circles. To counter this issue, operators have requested that the minimum block size should be reduced to 3MHz.

The last auction rules are not very favorable for the business continuity of incumbents on account of scarcity of spectrum. Reliance Jio Infocomm contends that the rules should not be changed in the current auction as its participation in the prior auction was based on stability of rules. To some extent this stance indicates Jio’s nonā€seriousness 900MHz spectrum auctions.

I believe this is a Big Challenge for Narendra Modi to strike harmony and put the Indian Telecommunications sector back on the track. What say ?

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