In a decision that may bring the much awaited cheer to the Ambani family, the telecom department has given the go ahead signal for liberalisation of 850 MHz spectrum being traditionally used by Rcom for CDMA EvDO operations to be converted to technology neutral and capable of deploying 4G LTE services. This will happen once Rcom pays the market determined price for the high efficiency spectrum on a pro rata basis for the remainder of the license period for that band in 19 circles.
This decision was crucial for the spectrum trading and sharing pacts between the Ambani brothers to materialise, as the current guidelines dictate that spectrum sharing can only happen between two operators who own spectrum in the same band in a circle and if both own either non liberalised or liberalised spectrum in that band. In the case of the Ambani brothers, Elder brother's Reliance Jio owns liberalised spectrum in 850 MHz band while younger brother's Reliance communications owns administratively allocated non liberalised spectrum in that band.
After the payment of Rs. 5900 Crore Rcom will have successfully liberalised its spectrum in these 19 circles and can go ahead with spectrum trading and sharing deals in these circles with Jio after 22nd Jan 2015. As you can recall Rcom recently signed an all stock swap deal for merging its operations with MTS which added more liberalised 850 MHz spectrum to its kitty in 9 circles and non liberalised spectrum in Rajasthan circle. Rcom could after liberalisation trade 5 MHz contiguous chunks in all MTS overlap circles to Jio and later enter into a sharing agreement with Jio for all 19 circles.
Jio currently holds Pan India liberalised 20 MHz chunk of unpaired spectrum in 2300MHz band along with 1800 MHz in 18 circles and 850 MHz liberalised spectrum in 10 circles. Jio plans on using the 850 MHz spectrum to achieve blanket coverage and provide seamless voice service through VoLTE. This nod by the DOT will strengthen the position of Rcom which is the 4th largest operator by market share and Reliance Jio which is launching limited service to its employees on 27th December. This spells trouble for incumbent operators Airtel, Vodafone and Idea which have at short notice rolled out LTE services in select towns to gain the early mover advantage.
The stage is being set, the battle field is getting heated. Who will emerge as the ultimate 4G LTE winner only time can tell. But there is one thing you can always count on, TelecomTalk will always bring to you the latest and trending developments in the Indian telecom market. Keep reading TT and stay ahead of the curve.