Spectrum refarming is a hot issue in Indian telecom. Telecom Commission of India recommended to go for spectrum refarming on 900 MHz band so that this band can be used for 4G roll out. Currently incumbent players like Airtel, Vodafone, BSNL are holding most of the 900MHz spectrum and Aircel, Reliance, Idea are having it in selected circles. New players who got licenses in 2008 have using 1800MHz band of spectrum for 2G services.

  • Make Telecom Talk My Trusted Source
  • Source of Google
  • Source of Google

Now 900MHz and 1800MHz are two bands primarily used for 2G services i.e. voice calls and EDGE based mobile internet. 900MHz has its own advantages over 1800 MHz as 900MHz networks offer almost double coverage than 1800MHz networks.

Earlier Telecom Commission said that spectrum refarming on 900 MHz can be done in three ways – 2.5MHz can be retained and extra spectrum will go for auction, 5MHz can be retained and more than 5 MHz will go on auction; or complete spectrum refarming. Operators can hold back spectrum if it wins in the auction.

However complete refarming is never acceptable, because it will create a mess. In latest development the Empowered Group of Ministers (EGoM) came up the policy that says incumbent players can keep upto 2.5MHz spectrum on 900MHz band but they have to pay the price of it as per the refarmed spectrum auction. These operators can bid maximum 2.5MHz (total 5MHz on 900MHz can be retained) in the auction of the surrendered 900MHz spectum.

Though 900MHz spectrum refarming is expected to give kind of level playing field for newer operators (though I seriously doubt it as they will be in high debt after the upcoming 1800MHz spectrum auction), incumbents are not happy. It is obvious that refarming means they have to redesign their existing networks – replacing older equipments and setting up more BTS as 1800MHz offers nearly 40-50% less coverage compared to 900MHz.