Happy times ahead for operators who are crying for spectrum as auction for 2G and 4G services are going to be conducted within 1 year. Telcos are waiting for more airwaves to support their increasing customer base.
Auction for 2G spectrum in India
It is important as Supreme Court cancelled 122 licences of some operators and asked to auction these returned spectrum. 2G auction for 800 MHz band for CDMA, 900 and 1800 MHz for GSM services is to be conducted soon. It may be that there are 2 auctions – one auction with returned spectrum from cancelled operators where incumbent players can not take part and second one with newly vacated spectrum will be open to all.
There is high chance greenfield 4G/BWA players like Reliance Infotel, Tikona and Augere may like to get 2G spectrum for voice services. Powered with 4G spectrum they will skip 3G spectrum for sure.
Auction for 3G spectrum in India
While 3G spectrum on 2.1GHz band is not coming soon, and still Defence services do not vacate 3G spectrum, it is unlikely to see auction for 2.1 GHz band for GSM- HSPA services. But it is crucial as current 3G-GSM operators have just 5 MHz spectrum with no pan India coverage and are facing huge spectrum crunch.
But there are talks to vacate spectrum on 1700-2000 MHz band. It should be noted that CDMA players are demanding for 1900 MHz band spectrum for rolling out 3G-CDMA services for a long time. I think it is high time to play justice to CDMA players.
Auction of 700 MHz spectrum – Road to Broadband
Telecom Minister Kapil Sibal is looking for auction of 700 MHz band airwaves at the end of this year. This auction is expected to be fierce one as biggies like Airtel and Aircel did not able to obtain pan India BWA spectrum and given the fact of data to be main revenue earner all operators will like to get a pie of it. This band of spectrum will provide better coverage and less infrastructural back up like earlier auctioned 2.3 GHz spectrum. It can usher the penetration of broadband in India.
Ministers of different departments are on meeting to ensure the vacation of 700MHz band and to sell the spectrum to the operators as soon as possible.
Some experts are saying that before 700 MHz spectrum auction there are few chances that current BWA/4G players will roll out services. But it will not happen and 4G on 2.3GHz band will be rolled out first on urban areas. As there areas have more population and hence high demand can be satisfied by this less-penetrative 2.3GHz band which can hold more bandwidth and data than 700 MHz band.
Auction is the best way?
I personally do not think auction is a good way to give away spectrum, as there is no end of this natural resources. It would be better that Govt give away spectrum to eligible companies at a cost which ensures affordable data & voice services to end users. Take the example of 3G, operator bought at a huge cost, they are in debt and after 2 years of roll out 3G is yet to take off. If Govt likes to earn money from spectrum it would be wise decision to insist on annual revenue sharing model with the operators.