Airtel, Idea, Reliance Jio, other telcos against auction of 700 Mhz band for now

Leading telecom operators like Airtel and Idea have asked regulator Trai not to auction the premium 700 Mhz band until enough devices are available for services that are to be provided through it.

Mukesh Ambani-led Reliance Jio, which is yet to launch its 4G services, has also suggested two-year evaluation of the ecosystem before radiowaves in this band are auctioned.

"It will be prudent to not auction the spectrum in 700 Mhz band now. A recommended approach would be to do an ecosystem evaluation in two years' time and plan the auctions accordingly," Reliance Jio Infocomm said in reply to Trai's consultation paper on value of spectrum for the next round of spectrum auction.

As per a paper of the Telecom Regulatory Authority of India, the cost of delivering mobile services in 700 Mhz band is approximately 70% cheaper than 2100 Mhz band.

Telecom major Bharti Airtel said: "Any immediate auction of the spectrum in 700 Mhz band will lead to underutilisation of the spectrum for several years and block industry's fund" and therefore it should be auctioned "only after development of a strong device ecosystem".

Vodafone said that while the ecosystem in this band is developing, "necessary caution may be exercised in respect of the terms of auction, including valuation, reserve price, rollout obligations, etc".

Two telecom operators - Telenor and Tata Teleservices - have, on the other hand, have favoured the auction of spectrum in 700 Mhz band.
Telenor said the device ecosystem for APT700 Band 28 is developing at a good pace and 214 devices are already available in this band globally.

"Assuming that the auctions are concluded in first quarter or second quarter of 2016 and the allocations of spectrum happens by third or fourth quarter of 2016, telecom service providers (TSPs) in India will be ready with their 700 MHz networks by mid 2017 and there will be big momentum in APT700 eco system by that time," Telenor said.

Reliance Communications suggested that the 700 MHz price should be calculated by indexing the last auction determined price of 800 MHz and then levying a 25% premium over and above the price arrived at after indexation.

A divide among telecom operators was also seen with respect to new spectrum holding limit rule proposed by the regulator.

As per present rule, spectrum cap in a frequency band is 50% of the spectrum assigned in each band in the respective service area and 25% of the total spectrum assigned in all bands put together in each service area.

While Reliance Jio, RCom and Sistema Shyam Teleservices favoured Trai proposal to consider 700 Mhz, 800 Mhz and 900 Mhz as one for the purpose of imposing spectrum holding limit, telecom major Airtel, Vodafone, Idea Cellular, Aircel, Telenor and Tata Teleservices voiced against it.

"RJIL believes that with liberalisation of spectrum, the intra-band spectrum caps have lost their relevance," Reliance Jio said, adding that spectrum being technology neutral, the intra-band limit has become redundant.

Airtel said that Trai to recommend increasing of overall spectrum cap from current 25% to 33% of the total airwaves holding but continue with 50% limit in a particular band.

The telecom major said that during the last few auctions, when a substantial amount of the spectrum in 900 MHz was assigned, the operators were subjected to band specific cap.

"We believe that changing these rules midway is illegal, unconstitutional and anticompetitive. The proposed sub 1 GHz cap would only help one operator, who has not even launched its services, to grab/consolidate entire spectrum in 800 MHz band and create a non-level playing field," Airtel said.

Even GSM industry body COAI echoed opinion similar to Airtel, Vodafone and Idea Cellular on new spectrum cap rule proposal.